The Democratic National Convention, citywide conventions, and major sporting events have contributed to a $500 million summer for Philadelphia’s hospitality industry. In addition to increases in hotel occupancy and RevPAR, the city also saw a boost at arts and cultural institutions and restaurants. Read more here.
Hotel operating fundamentals are still strong, but capital markets have been far less stable this year. Hotel investment has been cautious this year, with U.S. hotel acquisitions totaling $6.5 billion in Q2—down 50 percent year-over-year. The first half of 2016 marks a 55 percent decline from the first half of 2015. Single-asset purchases were down, but less severe: In 2016, $11 billion has been invested so far, down 33 percent from last year. There’s also some good news for the rest of the year—Q3 is looking far more promising if for no other reason than Marriott’s $12 billion acquisition of Starwood Hotels & Resorts. To read more, click here.
According to a recent United States Construction Pipeline Trend Report from Lodging Econometrics (LE), the markets expecting the largest number of new hotel openings in 2016 are: New York with 46 projects/7,129 rooms, Houston with 36 projects/4,145 rooms, Dallas with 25 projects/3,014 rooms, Miami with 21 projects/2,638 rooms, and Austin with 19 projects/2,176 rooms.
In the first half of 2016, the U.S. opened 380 hotels/42,798 rooms. 116 of these hotels and 17,084 of the rooms were in the top 25 markets, representing 31 percent of all hotels and 40 percent of the rooms opened in the first half.
The Marriott-Starwood deal now hinges on one final factor: Chinese authorities’ regulatory approval. In the meantime, travel management companies and corporations are already thinking about the impact of two major competitors merging, creating nearly 30 brands. Once the deal goes through, the hotel company will have nearly a third of corporate travel business in 14 of the world’s top 20 cities. This could push more competition from other hotel companies, as many will try to advertise more attractive rates than the new behemoth. Even after the deal is sealed, however, travel buyers will have time to adjust, as experts conclude that major changes from the merger should not be felt until the merged company begins preparing for the following year’s rates in 2017. For more information, click here.
Lodging Econometrics (LE) reports that the five U.S. markets with the largest hotel construction pipelines by project count are: New York with 196 projects/32,121 rooms; Houston with 170 projects/20,083 rooms; Dallas with 128 projects/15,682 rooms; Nashville with 109 projects/13,789 rooms; and Los Angeles with 104 projects/17,912 rooms.
New York has continuously had the largest project count since the fourth quarter of 2011 while Houston has had the second largest for the last ten consecutive quarters.
While California’s hotel real estate values have grown this year, the increase has dropped significantly, with larger real estate investment trusts excluding themselves from the market. Hotel sales values rose by 11.3 percent statewide, compared to the 25 percent increase during the same period in 2015. Read more here.