Lodging Econometrics (LE) reports that the hotel industry reached an investment of $21.8 billion in 2013, the highest level since 2009. Last year, 1,171 hotels were sold or transferred, a decrease of 19 percent year-over-year. Average selling price per room was $132,955 based on the 898 hotels that reported figures in the private domain. It was the highest level ever recorded, which LE attributes to low cap rates, improved profitability, a greater availability of lending, and a larger number of upscale hotels in the sales mix.
Publicly traded REITs accounted for 30 percent of buying activity, followed by privately held equity funds (27 percent) and hotel companies (15 percent). 2013 “was characterized by near-record-low interest rates, a growing confidence in future operating trends, and the prospect for improved earnings,” according to LE. “It was an opportune time for investors to sell and take profits on their stabilized assets acquired late last decade during the recessionary lows.”
