After a year of record-setting demand and favorable supply and demand mix, one of the questions STR’s Jan Freitag hears most often from the investment community is, “How long will this ride last?”
Freitag shares his answer in a new blog post today, in which he suggests demand growth rate will probably moderate around 2% by year end. Though down from the 7.2% during 2010 and the 4.9% during 2011, the 2012 projection is still ahead of the long-term U.S. average of 1.8%.
Looking ahead, there is one number that gives Freitag pause: the 34,000 hotel rooms that are scheduled to open three years out. That number has jumped considerably from the 4,000 reported during December 2010, making it clear that developers are eager to get back into the game after sitting on the sidelines for the past 36 months.
Travel from Brazil to the U.S. is expected to increase 16% during 2012 and another 15% during 2013, according to a spotlight on the Brazilian traveler conducted by Expedia. This comes after a 200% increase from 2010 to 2011.
The influx in travel would provide a much-needed boost to the U.S. economy, according to Expedia. Brazilian consumers spend more money when visiting the U.S. than any other nationality, with an average per-person spend of $5,114. They pay an average daily rate of $126 per night.
President Obama’s proposed defense budget, which would cut $487 billion in military spending during the next decade, has many hoteliers scrambling to bolster demand in military markets, reports HotelNewsNow.com’s Samantha Worgull.
In Sumter, South Carolina, for example, which is home to Shaw Air Force Base, 70% to 80% of the market’s demand comes from the military, according to Heidi Nielsen, senior project manager at the HVS Atlanta office. “If the base shut down, the hotels would have nothing,” she said.
Elsewhere throughout the country, hotel performance metrics in other military markets are generally flat or negative, according to STR data.
Palm Beach, Florida-based Chatham Lodging Trust had a record first quarter, with comparable hotel revenue per available room jumping 12.5% to $98 compared to the same period last year. Average-daily-rate growth was less pronounced but still up—from $123 during first quarter 2011 to $128 during first quarter 2012.
The performance increases were attributed, in part, to the real-estate investment trust’s property upgrade program, in which it invested more than $23 million renovating 13 of its 18 wholly-owned assets.
Washington, D.C., Chicago and New York are among the most highly rated hotel markets in the U.S., according to Hotel Compete’s “Guest Review Rankings Online Report,” which analyzes guest reviews from properties in top markets and averages them into a ranking between 1 and 10.
Washington’s current average rating was 6.37, followed by Chicago (6.35) and New York (6.35). Among the 25 markets analyzed, Fort Lauderdale, Florida, reported the worst average ranking with 5.06.
Compiled by Patrick Mayock.