As U.S. hotels close or dramatically scale back business during the COVID-19 pandemic, it’s difficult to assess the value of a lodging asset that may or may not be able to recover from steep losses in revenue. And some hotel segments, such as economy extended stay, are doing well when compared to their higher priced competitors. Suzanne Mellen and her cohorts at HVS have attempted to paint a picture of what hotel values may look like in the coming months. Presenters at Long Live Lodging’s LodgingStream digital conference on April 30 said it’s too early to tell if and by how much hotel market values may change, though one speaker said he’s seeing discounts of 25 percent to 30 percent emerging. This article is part of our special report on the coronavirus and its impact on the hotel industry.
Lodging Econometrics has tracked the hotel industry since 1998. Its global database includes new-hotel pipelines as well as renovations and brand conversions. Hotel franchisers once eager to launch new brands are focused on converting existing hotels because it’s a faster way to recover revenue lost to the COVID-19 pandemic than through new construction. In Episode 346, Lodging Leaders explores the increasing number of conversions in the U.S. hotel industry and what owners and operators need to consider before repositioning an asset.
In the first few months of the COVID-19 pandemic in the U.S., financiers anticipated a swell of distressed hotel businesses. Some raised rescue funds to respond to what they thought was a pending crisis. Though there are financial rescues taking place, the level of such activity is far below what industry advisers and fund managers expected. Commercial real estate investors positioned to act in the early days of the pandemic held off and are now just beginning to unleash their cash hoards totaling billions of dollars. Episode 345 of Lodging Leaders podcast explores the state of capital investment in the hotel industry.