Archive for April, 2010

With the much anticipated resurrection of hotel and resort transactions seemingly upon us, those who were involved in the hot market of 2006 and 2007 will recall that assessors tend to use a sale price as the market price for property tax purposes.

Most buyers use operating pro forma to assist with pricing decisions. These projections use assumptions about income, variable and fixed costs, including property taxes. All too often, pro forma property tax estimates are based on last year’s property taxes growing at the expected inflation rates. The disastrous impact of such estimates come post acquisition when the hotel fails to achieve pro forma because real estate taxes have increased dramatically beyond the pro forma assumption.

To avoid property tax surprises, Paradigm Tax Group suggests hotel buyers’ due diligence checklist should include three items regarding property taxes… Read More

An estimated 5.3% drop in net operating income for U.S. hotels is expected in 2010. This will represent the third consecutive year of decreases in this important performance measure.

While these annual forecast are disappointing, according to 4Hoteliers in their April 22 article “How To Recover in 2010,” a closer look at their quarterly movements of key indicators throughout 2010 reveals that U.S. lodging industry demand, occupancy, average daily rate, and rooms revenue per available room will all start to show year-over-year quarterly gains sometime in 2010.

Given the turn towards favorable market conditions, an opportunity will exist for some U.S. hotels to improve their performance and achieve growth in net operating income.

To identify potential tactics hotel operators can implement to take advantage of the improving operating environment, click here  to read the entire article from 4Hoteliers.com.