HOSPITALITY
“ Rates remain very strong , and there is a lot of pricing power going on with hotels right now ,” says Carter Wilson , senior vice president , consulting at STR . By the end of this year , STR is expecting RevPAR to be 30 percent higher year over year and about 10 percent higher as compared to the end of 2019 .
However , that recovery has not been even across different geographies and segments of the hotel market . Some city center properties are still struggling , and group demand is only back to about 70 percent of pre-pandemic levels , according to STR . In addition , the recovery is less robust when accounting for inflation . In real terms , full recovery of ADR and RevPAR are not projected until 2024 . “ There is no doubt that inflation does strip away some of those gains ,” says Wilson . However , real growth in average ADR exists with rates that will be up about 18 percent versus inflation at 9 percent , he notes .
BUYING OPPORTUNITIES FOR INVESTORS Prior to the Fed rate hikes in July , the recovery in occupancies and cash flows were driving a resurgence in property sales within certain segments of the market . MSCI Real Assets reported $ 44.5 billion in hotel sales in 2021 , and the first half of 2022 has maintained a steady pace with $ 22.4 billion in transactions .
New Hampshire-based Wason Associates Hospitality Brokerage Group enjoyed its best year for hotel investment sales transactions in 2021 — and 2022 could match that level . The firm sold 16 properties with an average price around $ 8 million . Year to date through mid-August , the firm has 13 properties that are either sold or under purchase
CIREMAGAZINE . COM COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE 21