Recent reports suggest a hotel asset manager and lenders should take advantage of rising profit histories and sale transactions to sell distressed and underperforming hotel assets soon. It appears we are at the beginning of the cyclical nature of hotel valuations once again. Coupled with the lack of any significant new hotel development, demand for existing hotels by investors should continue to grow. According to the latest PFK Trends and on the issue of rising hotel profits: “In 2011, lodging properties experienced over a 7% increase in rooms sales revenue for each readily available guestroom as well as over 6% growth in overall sales revenue. To compare factors, the typical 2011 Revenue-Per-Available-Room rate of growth reported by STR (Smith Travel Research) for USA lodging properties was a little more than 8%. Considering that the typical rise in RevPar with the entire nationwide room inventory is higher than that achieved, this implies that many U.S. hotels enjoyed increased profits of more than 12%.” Lenders and their hotel asset manager can read the full story here. In a separate report by HVS International on increased hotel sales transaction it was also evident in 2011 this correlates with increasing income from a hotel advisors perspective. Its conclusion is: “Many factors went into creating transactions opportunities in 2011, including confidence on the part of lenders and buyers, as well as a large number of bank-held properties being put up for sale” according to its hotel asset management specialists. Based on these recent findings, the timing appears right for a hotel asset manager with under-performing hotels or a lender with hotel loans in default to consider their sale options. If you are reading this story and see it a different way, please share your comments below.
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