HVS Global Hospitality Services concluded its annual Hotel Market Connections conference last month where hotel experts offered insight into hospitality supply, demand, and performance during the first half of 2016. As of last month, U.S. hotel inventory includes 54,258 hotels and more than five million rooms with 4,154 new hotels and 509,607 rooms in various stages of development. During 2015, transactions across 2,026 hotels nationwide totaled more than $40 billion.
Figures show that the market remained active in the first quarter of 2016 despite a slowdown compared to the previous year, with 516 properties sold in the first quarter of 2015 and 347 sold during first quarter 2016. The average price per room was reported as $138,361 during the first quarter of 2016, compared to $185,222 during the same time last year.
Increasing 6.6 percent last year, hotel values in Atlanta are expected to continue a modest uptick through 2019. Its marketwide occupancy reached an all-time high in 2015 with nearly 70 percent. Like Atlanta, Chicago’s hotel inventory is also due to grow in the next few years by as much as 8,360 new rooms. New Orleans is set to launch at least five luxury hotels by 2020, with upscale room availability increasing by 26 percent by 2019.
Denver and Portland, Oregon, are expected to see modest declines in occupancy in the coming years with an influx of new rooms entering those markets, but both are also estimated to experience an increase in average room rates. Finishing 2015 with occupancy levels at 87.2 percent, Manhattan is expected to maintain comparable rates of occupancy through 2018 despite a minimal decrease in its hotel values last year. Values are expected to rise minimally in 2018 and 2019, corresponding to a rise in RevPAR.
