CONFERENCE REWIND
Disconnect between strong economy and capital markets leaves investors puzzled , sidelined
THE DISPLACEMENT BETWEEN HOTEL DEMAND AND TRANSACTION ACTIVITY COULD CONTINUE UNTIL INVESTORS HAVE STRONGER CLARITY .
By DAVID EISEN
NEW YORK — Average daily rates at hotels continue to hit high watermarks and they don ’ t appear to be dampening demand among the traveling public . Change 2nd sentence from top to : At the luxury Aman hotel in New York , where the NYU International Hospitality Industry Investment Conference was being held , in June , rates were starting at more than $ 2,000 per night and that ’ s before any add-ons , like the omakase at Nama , which will set you back more than $ 200 per person .
“ Through the first four months of the year , hotel demand improved 4.3 %,” STR President Amanda Hite told a rapt audience at the conference . Indeed , according to STR , after a record year for ADR in 2022 , rate is forecasted to hit $ 154.28 for full-year 2023 .
The unquenchably optimistic Tyler
Morse , CEO of MCR , predicted that ADR would be up 10 % this year , calling inflation “ the greatest thing to happen for the hotel industry .” ( Hotels can drop and increase rates on a daily basis .)
Investors should be gung-ho on hospitality , right ? Not so much — yet . Though travel is strong and could become stronger as China and other countries open up further , fears over a recession , inflation trepidation and , above all , tougher financing conditions , have leant itself to limp dealmaking .
According to JLL , global hotel investment volume reached $ 71.9 billion in 2022 , a 2 % decline relative to 2021 . For HOTELS , JLL Hotels & Hospitality Group ’ s Ophelia Makis wrote that transaction activity in Q2 2023 is expected to be subdued akin to Q1 .
The displacement between hotel demand
6 hotelsmag . com Jul / Aug 2023