Hotel & Motel Management - September 1, 2008 - (Page 28) 28 News H&MM September 1, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Forecasts Continued from page 1 could end up being placed in other arenas. There are several possible factors for this dip. The JLLS survey points to “the illiquidity of the debt market, softening demand fundamentals due to economic uncertainty and high oil prices along with a robust supply coming online” as reasons for these inves- tor expectations. Markets with high international demand, such as Boston, New York, San Francisco and Washington, D.C., are expected to fare better over the medium term, while markets such as Atlanta and Dallas are expected to have the lowest activity in short-term trading and stay low into the medium term. Patrick Ford, president of Lodging Econometrics, estimated that, as of second quarter 2008, Dallas will have 27 new openings in 2009. It is easier to get deals done in cities like Dallas because sprawling layouts leave more land for newbuilds that are Ford away from the LODGING ECONOMETRICS city center, unlike New York or Boston, where new-builds are closer to the center, he said. How- ome e Welc Join W Lodging rs Trucke iation. Assoc s rucker Have T o your dt Directe erty. op Pr ever, this may leave cities like Atlanta and Dallas more vulnerable during times of economic uncertainty while the larger gateWoodworth PKF way cities are less affected. “So, that would mean if I was a trader, a buyer and seller of hotels, that these hotels are going to be in the center city of these market places. If [the economy] declines, it’s going to decline more moderately and bounce back quicker; therefore, they are more insulated from severe economic downturn,” Ford said. Investors “may be leery of cities with a large pipeline.” Over the past five years, the Dallas/Fort Worth area was the largest market in terms of supply growth, averaging 3.9 percent per year, according to Smith Travel Research numbers. Looking at the next three years, supply growth is predicted to grow 9 percent per year. “If you’re an investor Hennis whose strategy is more to HOSPITIUM buy and hold for the longer term, then there are markets like Atlanta, Dallas and Houston where, because of the prospects for added supply growth being what they are, they are going to be more volatile,” said Mark Woodworth, president of PKF Hospitality Research. “So you might shy away from those cities for that reason.” Atlanta may have more unique factors for its low transaction expectations. For more than a year after Hurricane Katrina, Atlanta took on most of New Orleans’ scheduled conventions and hosted many displaced families. “From an investor perspective, [during] the last quarter of 2005 and 2006, there was a significant surge in demand, occupancy and revenue per available room … in the back half of ’06 and ’07, you could see the benefit of Katrina receding back out,” Woodworth said. “There was a correction to more normal behavior. Any time you have atypical behavior, you should be careful when making an investment.” This extreme example could be an explanation for the overall dip in U.S. transactions as well. “Investments sales have grown at record rates every year starting in 2004,” Paider said. “There was record transaction volume in the U.S.” Some then could view this dip as a return to normal. “It depends on the way you spin it, but it could be a correction period, as it’s now closer to 2004,” Paider said. “All of these megaportfolios were selling, and that volume can’t be sustained.” This transaction lull also has affected luxury and upscale properties throughout the U.S. Stephen Hennis, managing director of Hospitium, a hotel consulting firm that specializes in the upscale and luxury sectors, reported that upscale and luxury trading dropped from $11.5 billion in the first half of 2007 to close to $3 billion the first half of this year. “Debt is harder to come by, as some lenders have pulled away from the market,” Hennis said. “Moreover, the economic outlook is uncertain, and with airfares and fuel prices on the rise, investors are underwriting deals more conservatively. With less aggressive debt terms and projected cash flows, investors’ pricing power has fallen significantly. “Many potential sellers have adjusted their exit strategy because they realize that they have missed their opportunity to sell at the market peak,” he said. “Additionally, some property sales have stalled and been taken off the selling block because market bids did not meet expectations. Some investors are waiting by the sidelines to see how the market changes over the next six to 12 months.” ccrowell@questex.com Under Construction The 185-suite Embassy Suites Columbus-Airport is under construction in Ohio. It is the third Embassy Suites property in the city and the first Design Option III prototype in the state. Scheduled for completion in the third quarter of 2009, it is owned by Airport Core Hotel LLC. Compiled by Elaine Simon, esimon@questex.com CIRCLE NO. 124 http://HotelMotel.com http://www.HotelMotel.com/digital_edition
Table of Contents Feed for the Digital Edition of Hotel & Motel Management - September 1, 2008 Hotel & Motel Management - September 1, 2008 Contents Element LEEDs Brand-wide Promise NABHOOD Speakers: Hold Rates Perspective Letters to the Editor Legally Speaking Satisfaction Trends AAHOA Update Energy Star Update Marketing Matters Events HotelWorld Update Trends & Stats Coffee Services Business Equipment Ad/Editorial Index Marketplace Classifieds Checking Out Hotel & Motel Management - September 1, 2008 Hotel & Motel Management - September 1, 2008 - Hotel & Motel Management - September 1, 2008 (Page 1) Hotel & Motel Management - September 1, 2008 - Hotel & Motel Management - September 1, 2008 (Page 2) Hotel & Motel Management - September 1, 2008 - Contents (Page 3) Hotel & Motel Management - September 1, 2008 - NABHOOD Speakers: Hold Rates (Page 4) Hotel & Motel Management - September 1, 2008 - NABHOOD Speakers: Hold Rates (Page 5) Hotel & Motel Management - September 1, 2008 - Letters to the Editor (Page 6) Hotel & Motel Management - September 1, 2008 - Letters to the Editor (Page 7) Hotel & Motel Management - September 1, 2008 - Satisfaction Trends (Page 8) Hotel & Motel Management - September 1, 2008 - Satisfaction Trends (Page 9) Hotel & Motel Management - September 1, 2008 - AAHOA Update (Page 10) Hotel & Motel Management - September 1, 2008 - AAHOA Update (Page 11) Hotel & Motel Management - September 1, 2008 - Energy Star Update (Page 12) Hotel & Motel Management - September 1, 2008 - Energy Star Update (Page 13) Hotel & Motel Management - September 1, 2008 - Marketing Matters (Page 14) Hotel & Motel Management - September 1, 2008 - Marketing Matters (Page 15) Hotel & Motel Management - September 1, 2008 - Events (Page 16) Hotel & Motel Management - September 1, 2008 - HotelWorld Update (Page 17) Hotel & Motel Management - September 1, 2008 - Trends & Stats (Page 18) Hotel & Motel Management - September 1, 2008 - Trends & Stats (Page 19) Hotel & Motel Management - September 1, 2008 - Trends & Stats (Page 20) Hotel & Motel Management - September 1, 2008 - Trends & Stats (Page 21) Hotel & Motel Management - September 1, 2008 - Coffee Services (Page 22) Hotel & Motel Management - September 1, 2008 - Coffee Services (Page 23) Hotel & Motel Management - September 1, 2008 - Coffee Services (Page 24) Hotel & Motel Management - September 1, 2008 - Coffee Services (Page 25) Hotel & Motel Management - September 1, 2008 - Business Equipment (Page 26) Hotel & Motel Management - September 1, 2008 - Business Equipment (Page 27) Hotel & Motel Management - September 1, 2008 - Business Equipment (Page 28) Hotel & Motel Management - September 1, 2008 - Business Equipment (Page 29) Hotel & Motel Management - September 1, 2008 - Ad/Editorial Index (Page 30) Hotel & Motel Management - September 1, 2008 - Ad/Editorial Index (Page 31) Hotel & Motel Management - September 1, 2008 - Marketplace (Page 32) Hotel & Motel Management - September 1, 2008 - Classifieds (Page 33) Hotel & Motel Management - September 1, 2008 - Classifieds (Page 34) Hotel & Motel Management - September 1, 2008 - Classifieds (Page 35) Hotel & Motel Management - September 1, 2008 - Classifieds (Page 36) Hotel & Motel Management - September 1, 2008 - Classifieds (Page 37) Hotel & Motel Management - September 1, 2008 - Checking Out (Page 38) Hotel & Motel Management - September 1, 2008 - Checking Out (Page 39) Hotel & Motel Management - September 1, 2008 - Checking Out (Page 40)
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