LOS ANGELES—How many statistics could three of the hotel industry’s smartest data wonks provide in 150 seconds? Quite a lot, actually, as the more than 2,000 attendees of the Americas Lodging Investment Summit found out during an opening general session.
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Jan Freitag
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Titled “The Fast Break—A Quick Overview of the Outlook for the Hotel Industry,” the panel hosted STR’s Jan Freitag, PKF’s Mark Woodworth and HVS’ Suzanne Mellen, who took turns presenting the most pressing data points for the U.S. hotel industry. STR is the parent company of HotelNewsNow.com.
Jan Freitag, senior VP of global development, STR
Freitag kicked things off on a positive note: “Indeed the world did recover. … We sold more rooms (in the U.S.) than ever last year.”
The skids are greased for the year ahead as well, he said.
STR’s new forecast projects occupancy growth of 0.5%, average-daily-rate growth of 3.8%, and revenue-per-available-room growth of 4.3%.
“Supply’s not an issue. Demand’s outpacing supply,” Freitag added.
The only wildcard that could depress recovery is group rates, many of which were negotiated during the recession, he said.
Freitag also shared some data from the “Distribution Channel Report,” which will be available for download on HotelNewsNow.com on Tuesday at 8:15 p.m. Eastern Standard Time.
Revenue share by channel
| Hotel direct |
43% |
| Global distribution system |
12% |
| Central reservations system |
17% |
| Brand.com |
19% |
| Online travel agency |
8% |
Mark Woodworth, executive VP, PKF Consulting USA
PKF’s forecast was a bit more optimistic than STR’s. The Altanta-based research company projects absolute occupancy of 60.5%, ADR growth of 4.7% and RevPAR growth of 5.4%.
Woodworth also shared some key stats from the top 50 markets tracked by PKF.
Of those 50, 41 markets had demand at or above their previous demand peak as of the third quarter of 2011. Forty-nine markets reached previous demand peaks in their upper-priced chain scales, while only 16 markets reached previous demand peaks in their lower-priced chain scales.
Almost half of the top 50 markets have fewer jobs today than they did in years past, Woodworth said. Unemployment is typically a strong bellwether of hotel performance, but that’s not the case in this landscape.
“Employment is very, very weak. Lodging demand is very strong,” he said.
So what accounts for this discrepancy? First, consumer income is up. And second, hotels rooms are more affordable, Woodworth said.
Suzanne Mellen, senior managing director, HVS
During 2011, major hotel sales (as measured by properties traded at or more than US$10 million) “surged” by 40%, Mellen said. Total dollar volume was up, too, to the tune of 74%.
Average price per key was up 12%, she added.
HVS is forecasting dollar volume of US$10.6 billion for 2012.
The plurality of buying activity was driven by real-estate investment trusts, which accounted for 43% of all sales and more than 50% of dollar volume.
The top sellers were owner/operators (45%), private equity funds (27%) and lenders (10%).
Much of the transaction volume was limited to the top 10 U.S. markets, which includes (in order of most active to least active): New York metro, San Diego, Washington, D.C. metro, San Francisco, Los Angeles, Southern Florida, Chicago, Hawaii, Boston and Dallas.
For the year ahead, Mellen said there likely will be more regional diversification.
