Here’s my hotel industry takeaway from Jim Butler’s great Meet the Money conference last week in beautiful LA.
- There is only one consensus about the future of our hotel industry among owners, lenders, franchisors, brokers, appraisers and attorneys…
- The consensus is that there is no consensus.
- The forecasters say the rest of this year and next year will have continued positive RevPAR growth of 4-5%, but at the same time everyone is concerned about overbuilding which is moving UP and occupancy trending DOWNWARD.
- All the brokers say now is a great time to sell (no surprises here!), but first quarter sales of hotels are down 52%.
- All the lenders say they have plenty of money for hotel loans, but loan originations, especially in CMBS – are plunging.
- Most investors and operators look for continued NOI growth but everyone is concerned about a possible downturn and increasing expenses.
- Everyone agrees that hotel revenue closely tracks GDP and hotel cap rates closely track ten year treasuries.
- Everyone agrees that no economist can predict GDP and ten year treasuries.
So my final takeaway is that none of us knows what the future holds, but we all love to talk about it….and if you want to make your own predictions, see all the conference presentations here and follow Jim Butler’s Hotel Law Blog here.