Archive for the ‘Hospitality’ Category

Hotels are reporting a significant year-over-year increase in advanced bookings for the summer months. According to HotelNewsNow.com, not only is demand up, but most hoteliers say pricing power has returned and they are finally able to push rates without experiencing consequential declines in occupancy. Over June, July, and August, occupancy, average daily rate, and revenue per available room are all expected to be up from their 2012 levels.

Consumer confidence and business confidence are coming back strong and significantly helping out with the new found demand for occupancy. In addition, the Dow Jones closed at above 15,000 for the first time, a factor that will lead more businesses to feel comfortable about sending their sales force on the road. Increased faith in the economy is also leading to a lengthening of stays, as vacationers and retirees are feeling more comfortable about their savings.

To read the full article from HotelNewsNow.com, click here.

Budget sequestration has yet to impact U.S. hotel properties, but experts predict the effects will be more prevalent as we get farther into 2013. According to HotelNewsNow.com, the $85 billion in budget cuts the U.S. government must meet by the end of September will begin to intensify over the next few months, and will result in a strain on the hotel industry, especially around military bases and other locations with a high governmental presence.

With reports of sequestration accounting for the loss of 750,000 full-time jobs by year end, the corresponding impact on consumer confidence and spending will be felt by many industries, including hospitality. For the hotel industry in particular, to date, the government business cancellations have definitely been in the tens of millions of dollars, and areas like Washington, DC are seeing a loss of about 7-8% in revenue.

To read the full article from HotelNewsNow.com, click here.

Analysis of over 7,900 recently closed hotels across the United States provides detailed insight into some interesting trends within the industry. According to HotelNewsNow.com, as one might expect, most of the hotel closures over the past decade have represented independent operations (80.8%), with economy properties a distant second (10.1%). Very few closures came at the high end of the spectrum (1.5%).

More surprisingly was the fact that almost 13% of all closures were from properties that were 10 years or younger. Some of the circumstances surrounding closings of such properties were unavoidable events such as natural disasters, but nevertheless, the number is still large. Most such closings occurred during 2004 and 2005. Geographically speaking, almost a quarter of the closings occurred in the Southeast, mainly due to hurricanes and humid, mold-friendly climates.

To read the full article from HotelNewsNow.com, click here.

Relevant data analyzed to date shows that the transaction market in 2012 slowed down considerably from the year prior. According to the Baltimore Business Journal, U.S. hotel transactions fell to about $12.5 billion in 2012, down from $19.4 billion in asset trades in 2011. Despite the slow-down, pricing still remained strong, and transaction activity is expected to rise again in 2013.

Revenue per available room is expected to continue its recovery and drive higher profits, while supply growth remains positive and financing more accessible. Additionally, the percent of transactions involving distressed assets dropped to 12% in 2012 compared to 30% in 2011. The shrinking amount of distressed properties to snatch up greatly contributed to the smaller amount of total transactions.