Increasing Opportunities for Hotel Investors
According to recent trends and optimism by many experts, 2015 looks like it will be a great year for the hotel industry. The number of hotel transactions has increased, average daily rates (ADR’s) are souring and lenders are creating more opportunities for hotel investors to get into the game. This equation may just be the perfect storm to help with selling your hotel at its peak and to help buyers hit the ground running, creating a good return on your investment.
Improved Hotel Values, ADR and Occupancy
Real Capital Analytics, Inc., published an article with the following statistics and provided image. Their article titled “Hotel 2014 Year in Review.”, says that hotel values climbed 14% in 2014. These values are due to an improved economy, more travelers on the road and more quality product in the market place. This swing is giving hotel owners greater leverage to increase ADR’s, and this trend isn’t expected to slow down either. In 2015 experts are predicting that the Average National Occupancy is expected to grow from 64.4% in 2014 to 65.1% in 2015, and ADR’s are going to increase by as much as five percent.
An Increase in Hotel Transactions
With all of the trends pointing in the positive direction, Real Capital Analytics, Inc. admits that hotel transactions are up 27% from 2013 to 2014 at a stunning $34.6 Billion Dollars. Much the same as ADR’s, OCC and hotel values; there is a bright outlook for 2015. Hotel leaders are predicting that number of hotel transactions will also be on the upswing for this year. Many real estate mobiles are familiar with this swing, created by a simple trickledown effect. Sellers are selling, buyers are buying and more importantly, lenders are lending.
Lenders to Increase Funding for 2015
In the Hotel Lender Survey, conducted by STR, Inc., RobertDouglas and Hotel News Now, research was conducted with a select number of lenders. The survey resulted in 83% percent of the lenders say that in 2015 they expect to fund an amount equal to, or greater than, the amount they funded during 2014. In addition, 70% of lenders expect hotel property values to increase over the next 12 months. One of the largest break-troughs we are hoping to see this year is in hotel lenders focusing more on location and quality of the real estate, opposed to the cash flow focus of previous years. It’s also worth noting that if you are a developer there is positive news for you too. Lenders who provide construction financing have a high interest in every property class in the hotel industry, with the exception of economy brands.
Hospitality Team to Help With 2015 Goals
If it was your New Year’s resolution to buy, sell or develop a hotel, our Sperry Van Ness Hospitality Team can put together an evaluation and determine if the timing is right for you. Natvar Nana and Bryan Morelock, both hotel and land advisors, have teamed up to provide exceptional service, with a wealth of hotel experience and the most advance marketing techniques in the industry. Sperry Van Ness believes in product type specialization and the hospitality product council is one of the most recognized advisories within SVN. Natvar Nana and Bryan Morelock, have dedicated over 20 years to Hotel Brokerage. This team has been involved in, and has closed on, over 100 hotel and land transactions over the years. Complementary hotel evaluation services is an ongoing offering that can be obtained by the SVN Hotel Advisors. If you are looking for a hotel investment or have development plans for a hotel ground breaking, contact us through the comments section below, and we will personally help you get started with your project.
About Bryan Morelock – Over more than five years, Bryan has gained significant knowledge of the retail and restaurant sectors. More recently, he has focused on honing his skills and working with clients in the hospitality sector, which he is particularly interested in. Click here to read his other blog posts, or if you would like to contact him, you can call him at 850-434-7500, or email him at [email protected]