The U.S. hotel industry reported increases in all three key performance metrics for first-quarter 2012 in year-over-year measurements, according to data from STR , parent company of HotelNewsNow.com.
The industry’s occupancy increased 3.8% to 56.8%; average daily rate rose 4% to $103.54; and revenue per available room was up 7.9% to $58.78.
“The industry’s positive momentum continued in the first quarter against difficult year-over-year comparisons,” Bobby Bowers, senior VP of operations at HotelNewsNow.com’s parent company STR, said in a news release. “First-quarter demand slowed somewhat versus the same period last year but remained surprisingly robust. RevPAR moved up nearly 8%, fueled by solid ADR growth and positive occupancy movement. April’s performance will likely be somewhat weaker. However, we expect ADR growth to continue at, or near, its current pace with some deceleration in occupancy growth for the balance of 2012.”
The right project, with the right partner, in the right market will find construction financing today, according to HotelNewsNow.com’s Jason Q. Freed.
“It is a good time to build a hotel in the $4-million to $10-million range,” Steve Diedrich, principal at Economic Development Associates, which develops credit structures and obtains financing from public and private sources to fund commercial construction projects, said Monday during a panel at AmericInn’s annual conference in Minneapolis. “Lenders want to do deals, but their hands are somewhat tied. However, they can’t make money without lending money.”
Greg Hanis, president of Hospitality Marketers International, said there are markets in the United States that were in need of additional supply at the start of the recession in 2009 and yet no projects came to fruition because of the financial collapse. Those markets still have enough demand to absorb more hotel rooms, he said.
The United Arab Emirates is catching the eye of hotel developers, reports HotelNewsNow.com’s Shawn A. Turner.
Wyndham Hotel Group, for one, has 20 properties in its United Arab Emirates pipeline . “It’s definitely a region we’re focusing on,” CFO Robert Loewen said.
Abu Dhabi is a particular focus outside Dubai, development executives said. The market will more than double its base of 13,000 rooms by 2014, according to Jalil Mekouar, managing director, Middle East and Africa for Jones Lang LaSalle Hotels. By comparison, Dubai will add 11,000 more rooms to its inventory by 2014, Mekouar said.
U.S. hotel investors are beginning to look away from coastal gateway markets when seeking acquisitions, HotelNewsNow.com’s Turner reports.
Of the 25 single-asset sales that were not part of a portfolio deal, a total of four occurred in Illinois, Missouri, Tennessee and Minnesota. Examples include Inland American Real Estate Trust’s $22.6-million purchase of the 195-room Hilton St. Louis Downtown and RockBridge Capital’s $18.5-million deal for the 304-room University Hotel Minneapolis.
“It’s starting to broaden out,” LW President and CEO Dan Lesser said. “Folks are definitely seeing opportunities in the middle of the country. … There are tremendous opportunities in the middle of the country.”
We referenced development taking hold in the United Arab Emirates earlier in “5 things,” and here is more proof that demand exists to justify that development push. Abu Dhabi saw a 17% increase in hotel guests and a 10% jump in nights sold during the first quarter, according to TradeArabia.
A total 594,918 guests stayed in Abu Dhabi during the quarter, according to Mubarak Al Muhairi, director general of the Abu Dhabi Tourism & Culture Authority. Many of the global visitors came from China, with Abu Dhabi notching an increase of 86% in the number of visitors from China.
“Having just completed a five city road show across China, we are confident of building momentum from the country,” Al Muhairi said.
Domestic tourism also was up, showing an 11% increase in guests and 8% growth in guest nights.
Compiled by Shawn A. Turner.