Eight out of 10 U.S. hospitality executives remain bullish on the marketplace as investors continue to hunt for deals, according to the DLA Piper 2012 Hospitality Outlook Survey. Respondents indicate that a strong appetite exists for hotel transactions, fueled in part by a significant uptick in private equity investment activity, as well as flattening asset values.
“Enthusiasm remains high but the hospitality marketplace is in a period of transition,” says Sandra Kellman, global co-chair of DLA Piper’s hospitality and leisure practice. “Looking ahead, it is clear that the industry expects that there will be some deal velocity, although it may be choppy.”
Additional highlights from the survey include:
- For the second consecutive year, 9 out of 10 respondents believe that market conditions have created good buying opportunities for well-capitalized investors.
- 78 percent of respondents believe that the political gridlock in Washington, DC, poses a chief threat to the recovering hospitality industry.
- Only 47 percent of respondents expect hotel asset values to rise in 2012, down sharply from 82 percent of respondents in 2011.
- Private equity investment is on the upswing: 76 percent of respondents expect private equity investors to be the most active in 2012, jumping up from 40 percent in 2011.
- 9 out of 10 respondents expect that the industry’s “debt hangover” will force more hotel properties into the marketplace in the coming year.
- Representing the first drop in three years, 29 percent of respondents expect that their hotel debt will be refinanced or restructured in 2012-down from 37 percent in 2011.
- Only 19 percent of respondents participated in “daily deal” website promotions in 2011, but of these respondents, 90 percent cited these deals as sources of repeat business.
- Respondents rank TripAdvisor and Expedia as the two most influential websites for travel customers, trumping the influence of social media’s “Big Three”: Facebook, Twitter, and LinkedIn.
