The transaction landscape is picking up steam, and panelists during an NYU Investment Conference breakout session brought the numbers to prove it, reports HotelNewsNow.com’s Jeff Higley. Among them:
- Art Adler of Jones Lang LaSalle Hotels said there has been $5.1 billion of hotel transactions in the U.S. through May of this year;
- six new private equity funds between $500 million and $2 billion have closed in the last two months, said Mark Elliott, senior managing director for Hodges Ward Elliott;
- debt yields from aggressive lenders range from 8 to 8.5, which suggest cash flow for an asset, while debt yields for lenders with traditional underwriting parameters range from 10.5 to 11.5, said Kevin Mallory of CB Richard Ellis Hotels; and
- spreads range from 250 to 450, depending on the position of the loan in the capital stack, and debt pricing is driven by trailing 12-month net operating income, Mallory added.
Stock market jitters and impending elections in Greece haven’t clouded the outlook for the data wonks at PwC. The group’s revenue-per-available-room forecast for the U.S. has held intact for 2012, while average daily rate is expected to gain steam.
According to the new projections, RevPAR will end this year with 6.5% year-over-year growth; the metric will increase an additional 5.6% during 2013. ADR is expected to grow 4.3% during 2012 and 4.8% during 2013.
The outlook for RevPAR recovery reflects continued momentum in business travel, including gains in corporate meetings, as well as leisure travel growth that includes greater volumes of international visitors. As a result, lodging demand in 2012 is expected to increase 2.5%, which combined with still restrained supply growth of 0.4%, is expected to boost occupancy levels to 61.3%, the highest since 2007.
The Baird/STR Hotel Stock Index reported a 6.5% decrease in May to 2,345, although it is still up 15.8% year-to-date 2012. The index ended 2011 at 2,025.
The MSCI REIT (RMZ) (-4.8%) and the S&P 500 (-6.3%) also reported decreases in May.
“May was a slow month overall for the stock market due to many underlying factors,” said Randy Smith, chairman and co-founder of STR, parent company of HotelNewsNow.com. “Although weekly results during the month prove that growth was muted, the hotel industry continues to regain its footing. We expect performance to remain steady as travel demand persists throughout the summer months.”
As the online travel market matures in the U.S., expect annual growth to slow from 10% during 2010 to 5% during 2016, according to new research from eMarketer. That still adds up to big numbers, however; while online sales generated $99 billion during 2010, that number is expected to surpass $150 billion by 2016.
Travel marketers’ largest opportunities to gain additional market share will stem from continued significant smartphone adoption, eMarketer found in its “US Online Travel Sales
and Booking Forecast.” For the remainder of 2012, the firm estimates three out of five U.S. Internet users will research travel online this year. More than half of all U.S. Internet users will actually book travel.
If you’re reading this in Tokyo’s Haneda airport, odds are your flight will be on-time. HND boasts a 94.73% on-time performance rating, which is tops among the globe’s 30 busiest airports, according to FlightStats May 2012 Airline and Airport On-time Performance Report.
Rounding out the top 10 are:
2. BKK Bangkok, Thailand: 87.41%
3. PHX Phoenix, Arizona, USA: 86.69%
4. SYD Sydney, Australia: 85.71%
5. CLT Charlotte, North Caroline, USA: 84.92%
6. AMS Amsterdam, Netherlands: 84.59%
7. LAX Los Angeles, California: 84.46%
8. ATL Atlanta, Georgia: 83.36%
9. MCO Orlando, Florida: 82.79%
10. IAH Houston, Texas: 82.20%
Among the air carriers themselves in North America, Horizon topped the list with an on-time performance rating of 94.34%, followed by Hawaiian Airlines (93.86%), Taca International (91.09%) and Alaska Airlines (90.75%).
Compiled by Patrick Mayock.