Post originally made on January 5, 2012
It’s a new year and time to look ahead to the hotel industry’s 2012 outlook. And, trust me, there’s no shortage of data coming through my inbox these days. Like many of you, this is a time of year in which I look forward. It’s always interesting to see what prognosticators are thinking as we put last year behind us and turn optimistic for a better year to come.
Of course, beauty is always in the eye of the beholder. So as I spew out some of the numbers being sent to me, read into it what you like.
Let’s start with occupancy. As we know, occupancy has been building over the last year, offering hoteliers a bit of optimism that rate will soon follow. TravelClick says that its occupancy outlook for the fourth quarter 2011 through the third quarter of 2012 shows a year-over-year increase of 3 percent for the top 25 markets based on group commitments and transient reservations on the books. The average daily rate for the same period is ahead by 3.6 percent compared to the same time last year, according to its latest edition of The TravelClick Perspective.
This combination of occupancy and ADR improvements put the revenue per available room (RevPAR) outlook at 5.3 percent ahead of the same time last year, the firm says. Based on forward-looking reservations on the books, 22 of the top 25 markets in North America show an increase in ADR for the fourth quarter of 2011 through the third quarter of 2012 compared to the same period last year. The only markets showing year-over-year ADR declines are San Antonio, Denver, and Atlanta.
Meanwhile Jones Lang LaSalle Hotels says its initial results from the firm’s Hotel Investment Outlook 2012 report suggest that despite continuing economic uncertainty, global hotel transaction volume will hold steady in 2012 to again reach upward of $30 billion in deals. “So far, the dislocation in the financial markets has not impacted underlying trading fundamentals. This has reassured investors to a certain degree and has underscored the attractiveness of high quality, income producing hotel real estate as an asset class,” Arthur de Haast, chairman of Jones Lang LaSalle Hotels, said in a press release announcing the forecast.
The news isn’t entirely optimistic. Trepp LLC, a provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, reports that in December, delinquency rate for U.S. commercial real estate loans in CMBS rose seven basis points to 9.58 percent. That comes following a positive November report that saw the delinquency rate fall 26 basis points. However, other outlets such as STR report that delinquency rates are stabilizing.
In addition, Lodging Econometrics has again revised its forecast for new hotel openings to show a slightly downward trend for the next three years. The firm now projects a total 339 hotels/38,287 rooms in 2012. In 2013, 370 hotels/38,248 rooms are anticipated to enter current supply.
These are just a few of the early looks at the near future that are coming out post holidays. Later this month, the industry will gather in Los Angeles for the Americas Lodging Investment Summit, where we’re sure to hear plenty more about what to expect in 2012 from these and other experts.
Can’t wait to get there and find out what they think.