THE CASE FOR URBAN ,
THE SEESAW NATURE OF THE DAILY OCCUPANCY RATES AND THE CONTINUAL RE-PRICING OF ROOMS INHERENT TO HOSPITALITY MEANS THAT EVEN A FEW BOOKINGS OF LARGE MEETINGS AND GROUP EVENTS CAN RESULT IN A DRAMATIC INCREASE IN OPERATING REVENUE , PROFITABILITY , AND ASSET VALUE .
– DOUGLAS HERCHER
INVESTMENT
THE CASE FOR URBAN ,
BIG BOX HOTEL INVESTMENT
WELL-CAPITALIZED INVESTORS WITH A SUFFICIENTLY LONG-TERM INVESTMENT HORIZON STAND TO REALIZE OUTSTANDING RETURNS ON INVESTMENT .
Contributed by STEPHEN O ’ CONNOR AND DOUGLAS HERCHER , RINCIPALS AND MANAGING DIRECTORS , ROBERTDOUGLAS
The question of the day for many hotel investors is , “ Where do we go next ?”
With valuations for select-service , extended-stay and drive-to resort properties pushing above , in many cases , 2019 levels , we believe that investors will soon turn their attention to full-service and groupdependent hotels that can still be acquired at below pre-pandemic levels . In particular , over the next 12 to 24 months , the “ big box ” hotel market should offer some of the most interesting opportunities of this cycle .
By way of context , according to STR , there are 360 U . S . urban hotels with 400 rooms or more . These big box urban properties , often affiliated with convention centers , represent massive investments . This makes them some of the largest and potentially most valuable assets of the hospitality sector , especially as their substantial costs are often offset in part by large
56 hotelsmag . com July / August 2022