For the first time in more than two years, select-service investor sentiment has turned a corner and marked improvement, according to Jones Lang LaSalle Hotels‘ biannual U.S. Select Service Hotel Investor survey. Over the next six months, 53 percent of respondents anticipate flat or increasing RevPAR. That outlook improves over the next 12 months to 85 percent of respondents. Jones Lang LaSalle Hotels’ proprietary survey was completed by nearly 300 of the nation’s top select-service hotel owners and investors.
According to the survey, investors’ "buy" sentiment has continued its upward momentum, increasing by seven percentage points over the past year. More than 60 percent of investors are aggressively targeting distressed assets as their first choice for investment. Many investors feel it is a favorable time to buy at a discount to properties’ intrinsic values.
According to metrics obtained in the survey, average select-service asset values—having declined in the past two surveys by 10.8 and 18.6 percent, respectively—have remained steady over the past six months, providing welcome news for investors after the wave of significant decreases in value.
Compared to the survey conducted six months ago, investors have a more positive outlook for select-service hotel RevPAR. Over the next six months, 12 percent of investors expect RevPAR to improve in year-over-year comparisons, and 41 percent anticipate flat performance. Forty-seven percent of respondents anticipate continued RevPAR softening over the next six months, but this marks a decrease from 64 percent in the last survey. Eighty-five percent of respondents anticipate flat or increasing RevPAR.
