Functional Obsolescence

Some Hotels Never Recover

ADR Cycles in the U.S. Hotel Industry By: Hans Detlefsen, Carter Wilson, and Hannah Smith Hotels always recover from economic downturns, right? Wrong. It is true the U.S. hotel industry, in aggregate, has always rebounded from past recessions. But this trend masks the fact that each cycle has winners and losers. Many hotels never recover. …

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Hotel Underwriting Tips

Hotel Underwriting Tips

A Checklist For Hotel Underwriters As the owner of a hotel appraisal and advisory company, I get the opportunity to review hundreds of hotel appraisals, feasibility studies, investment pitch books, and offering memoranda each year. One of the things I’ve learned over the past two decades is that a few small changes in underwriting assumptions …

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Airbnb’s Market Share of U.S. Lodging Demand

A Rapid Rise Since 2007, when Airbnb was created, the U.S. lodging industry has experienced a rapid increase in both traditional hotel demand and lodging demand occurring in the sharing economy. Airbnb has become a dominant channel for listing available lodging units in the sharing economy.[1] In this article, Hotel Appraisers & Advisors (HA&A) estimates …

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The 40 Most Successful U.S. Hotel Investments

Introduction and Methodology This article is the first in a series of articles that will discuss various characteristics of the 40 most successful hotel investments in recent U.S. history[1]. Hotel Appraisers & Advisors, LLC (HA&A) evaluated thousands of hotel transactions that occurred during the past 20 years. We narrowed our evaluation to hotels that have …

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Hotel Cap Rates Are Inching Up: Is It a Good Time to Sell Hotels?

Introduction For the past seven years, hotel capitalization rates (cap rates) have generally declined, according to investor surveys.  The last time hotel cap rates increased for consecutive survey periods was in 2008, as the investment community realized the U.S. economy was in the early stages of a severe economic recession. From 2008 through early 2010, …

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Quantifying Chicago’s Pent-Up Lodging Demand

Chicago’s Sold-Out Hotel Nights Represent 1.6 Million Unaccommodated Room Nights of Lodging Demand Annually Introduction Popular tourism and business destinations, like Chicago, experience significant weekly and monthly fluctuations in lodging demand. Different leisure, corporate, and convention travel schedules combine to create patterns of peak lodging demand throughout Chicago’s downtown area. June is the busiest month, …

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Hotel Development & Public-Private Partnerships

Public-Private Partnerships This article discusses how communities can use public-private partnerships to attract hotel development projects and why policy makers should care about developers’ cost of capital. Although many communities have identified the need for a new hotel or conference center, market demand may not be sufficient to cause the private sector to develop such …

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