Based on several hotel advisors this week, industry fundamentals such as higher room rate pricing to rebound and less new hotel construction in the pipeline continue to fuel a rebound in the lodging sector, according to this hotel real estate consultant. Couple this with increased hotel acquisitions by private equity and institutional investors in a major market such as California,Hotel Analyst Notepad along with projected room price improvements going into 2011, and it’s the hotel industry recipe equivalent of a good Rev-Par stew (Revenue-per-Available-Room) simmering to drive growth in the near future in operating income and hotel real estate valuation cap rates. Here are some of the highlights of what these other hotel advisors had to say and the respective links: – Pricing expected to set the trajectory of recovery next year; – U.S. hotel pipeline continues downward trend in July 2010; – California hotel sales jump 59% through first half of year; – STR releases “optimistic” forecast for 2010; – American Express says hotels regain price power in 2011. Overall, many hotel advisors believe that late 2010 and the first half of 2011 are the best times to buy and sell in this particular hotel real estate cycle. However, this hotel real estate consultant believes that as fundamentals improve, the tendency of banks continuing to extend their hotel loans will diminish. In turn, this will set the stage for the increased supply of distressed hotel assets that have not yet come to market in 2010 and 2011.
