Hotel Sector Keeps Picking Up Steam

Ian Ritter is online content manager at GRS Group

Ian Ritter is online content manager at GRS Group

The hotel sector of commercial real estate saw a bit of a lag for a few years during the Great Recession, but that is starting to change. Many hotel operators and managers are starting to get more aggressive with their expansion and investment plans.

One of the newest developments is a nationwide expansion by the Standard hotel group. The hotelier has bought a 51 percent stake in Bunkhouse, another boutique firm, based in Austin, Texas, that operates assets throughout its home state that cater to visitors who are traveling for entertainment purposes, mainly music festivals.

The acquisition follows a series of deals that have taken place in the hospitality sector. InterContinental Hotels Group recently bought the boutique Kimpton Hotels & Restaurants brand, while Marriott is buying up assets in Canada and Africa. At the same time, Starwood Hotels & Resorts is seeing a buyers’ market and is looking to dispose of some of its properties.

Consulting firm HVS reports that the hospitality sector is performing extremely well. The firm’s hotel-sector index rating shows some interesting results. This shows that Norfolk, Va.; assets have increased in asking prices by 22 percent. After that, Phoenix had a 21-percent increase, followed by Oakland, at 18 percent.

Look for Tucson, Oakland and the Raleigh-Durham area of North Carolina to heat up next.

Meanwhile, PwC says that the hotel sector is on the upswing. The brokerage firm sees RevPAR increasing by seven percent this year. In 2016, the firm predicts that RevPAR will increase again, at 6.1 percent, despite more product coming on the market.

The hotel sector can often be overlooked, but don’t count it out as the economy continues to improve.

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