Officials of the North American Tourism & Hospitality Investment Conference (NATHIC) in conjunction with Lodging Econometrics, the lodging industry’s leading consulting partner for global real estate intelligence, today announced that respondents to a survey of hotel owners and investors found high interest in both buying and building hotels-signifying a continuation of the current lodging real estate cycle. The survey includes responses from hoteliers who currently are “active” in the market. The 7th annual NATHIC event will be held November 4-6 at the Fontainebleau Hotel in Miami. NATHIC is a part of Questex Hospitality + Travel’s International Hotel Investment Forum (IHIF) Summit Series.
Development was the hottest topic on the survey, with nearly half of the participants opening one hotel in the past 12 months and approximately 30 percent opening two or more. Nearly one-fourth has $50 million in equity for new construction investments, and 20 percent have $200-plus-million to leverage for hospitality investments.
“With the outlook projected to remain positive for the hotel industry at least through 2017 and continued historically low interest rates, hotels continue to attract a great deal of interest from investors, especially giving the recent volatility of the capital markets,” said Alexi Khajavi executive vice president, Questex Hospitality Group. “Although the survey group was targeted to owners/investors, we were somewhat surprised by the aggressive appetite of the respondents. These are some of the critical topics that will be discussed in depth at the conference.”
The survey identified the five most attractive hotel markets and interesting details on developer, buyer and owner sentiment looking back and looking forward.
Development held the highest interest for respondents with 46 percent having built a hotel within the past 12 months. Two Texas cities ranked highest in development interest with hoteliers citing two cities in the top five: Austin, 15.4 percent and Dallas, 13.8 percent. Three other cities attracted interest of more than nine percent, in rank order: Los Angeles, 9.6 percent, New York, 9.3 percent; and Tampa at 9.3 percent.
Buyers were also aggressive in their outlook with 38 percent of respondents having purchased a hotel in the previous 12 months with nearly half that number (19.4 percent) purchasing two to four properties. Chicago topped the MSA with the highest interest in buying hotels with 29 percent. Seven other markets were favored by at least 20 percent of respondents in numerical order: Los Angeles, San Diego, New York, San Francisco, Austin, Tampa and Orlando.
Hotel owners expressed much less desire to sell with no market exceeding 9.3 percent interest (New York) and only three other markets above five percent in rank order: Dallas, Orlando and Austin. On average, there were approximately four times as many interested buyers than interested sellers. In stark contrast to the home real estate market – talk about a sellers market!
A “Global Hotel Supply Perspective” outlook will be presented during the conference on Friday, November 6th, at 9 a.m. Hosted by J.P. Ford of Lodging Econometrics, the event will wrap up the multi-day conference targeting hotel owners, operators and investors.
Industry icon Leland Pillsbury, chairman, Thayer Lodging Group, a Brookfield Company, will give the closing keynote to cap off the event. “It’s an education—sharing knowledge and information. An informed investor benefits everybody. That’s the most important thing. The more investors understand, and have a good working knowledge of the intricacies, then the better their investments will be,” Pillsbury noted when asked what are the benefits to attending NATHIC. “Programs like this give you that opportunity to get to know and evaluate experts and begin relationships. You can’t operate on your own.”