The San Francisco/San Mateo market reported the largest growth in average daily rate and revenue per available room in February, according to new data from STR, parent company of HotleNewsNow.com.
The market’s ADR rose 16.1% to $168.31; its RevPAR jumped 20.5% to $123.80; and its occupancy increased 3.8% to 73.6%. Overall, the U.S. hotel industry’s occupancy rose 3.5% to 57.4%; its ADR was up 4% to $103.18; and its RevPAR increased 7.7% to $59.21.
Among the top 25 markets, Houston achieved the largest occupancy increase, rising 11.9% to 68.7%.
From the hotel finance department: Panelists at this week’s Hunter Conference said development financing and hotel investment are both safe bets in 2012.
Banks still are unsure on construction financing and international lending, but panelists said there is money in the market for the right borrowers with the right business plans. It’s just a matter of whether borrowers are willing to accept recourse or not, said Raphael Fishbach, principal at Mesa West Capital.
At Wells Fargo, Jennifer Dakin, senior VP and team leader of the company’s hospitality finance group, is doing recourse and nonrecourse deals and pricing deals differently for both.
Developments, renovations and conversions typically are requiring 40% to 50% recourse, Dakin said. Nonrecourse deals are priced at Libor plus 400 basis points.
In similar news, cash-flowing properties, and assets located in strong markets, make for sound investment opportunities, panelists said during a breakout session titled “Buying and Selling Hotels Today”.
Russ Urban, senior VP of acquisitions and development for HEI Hotels & Resorts, said his company primarily targets center-city, full-service properties that are “a little bit broken.”
If a company purchases a hotel in a fantastic market, and does absolutely nothing to the hotel and the market rises, the acquiring company ends up a winner, Urban reasoned. On the other hand, if a company purchases an asset and spends a lot of money fixing it up, but the hotel is in a lagging market, the acquirer won’t see as great a return on investment.
The U.S. hotel industry, benefitting from two years of sporadic recovery, should continue to enjoy gains in occupancy and pricing power through 2014, with rising profits luring greater levels of investment, according to CoStar Group, citing industry forecasts.
The number of sales of flagged select-service assets doubled last year, contributing to a 78% spike in sales of branded select-service, limited-service and economy hotels, Marcus & Millichap said in its first-quarter 2012 hospitality update, analyzing data from CoStar and other industry sources.
Investors are showing particular interest in select-service transactions as capital continues to flow into lodging, according to Jones Lang LaSalle Hotels, which forecasts that 2012 volume of select service hotel portfolio sales will likely double during 2012.
Pittsburgh hotels hit their highest occupancy rate in more than a decade last year, according to a story in the Pittsburgh Post-Gazette citing data from VisitPittsburgh.
VisitPittsburgh reported overall occupancy rate for Pittsburgh hotels was 68.2%, which was far higher than the national average of 60% and best among the city's competitors, the newspaper reports. It marked the first time in more than 10 years that occupancy has been so high.
The agency also said that it had booked 538 meetings and conventions for 2011 and beyond, compared to 472 meetings and conventions booked in 2010.
A new hotel booking site called Tingo—launched Wednesday by Smarter Travel Media, a subsidiary of TripAdvisor—automatically rebooks hotel rooms at a lower price if the rate drops.
Tingo keeps watching the price and rebooks again and again if the rate decreases. It refunds the difference to a traveler’s credit card shortly after their stay. Tingo shares a parent company with AirfareWatchdog.com and travel deal site SniqueAway.
“There are other sites that offer money back for hotel price drops, but that is only if someone books the same hotel for the same exact dates as you,” George Hobica, the CEO AirfareWatchdog.com, told Mashable. “Tingo gets you the lowest price whenever the hotel drops the price, not based on what other people book online. There’s also no limit to how much money you can get back.”
Compiled by Jason Q. Freed.
