(Save the date: RealShare L.A.comes to the Hyatt Regency Century Plaza in Los Angeles, CA on March 27, 2013)
LOS ANGELES-An overwhelming majority of U.S.-based hotel owners and others in the hospitality industry are bullish on the prospects for 2013, a new survey says, as the economy continues its slow recovery and both business and leisure travel gradually picks up.
A staggering 98% of owners, brokers and related hotel professionals say that their so-called “RevPAR” figures—a common measure that’s used to gauge the industry’s health, based on occupancy and rental rates—will go up by about one percentage point in the months ahead.
“The hotel business is clearly on the mend,” said Jim Burba, president of Costa Mesa, CA-based Burba Hotel Network, which helped to conduct the survey and is co-sponsoring the Americas Lodging and Investment Summit that started Tuesday here at Downtown’s JW Marriott and the adjacent NOKIA Theatre.
In another survey that was released today at ALIS, 82% of CEOs and other top execs polled by the hospitality experts at Chicago-based international law firm DLA Piper said they expect overall hotel assets to rise this year—nearly double the number of respondents who answered the same question a year ago.
Among those who are bullish on the hotel industry is Mark Woodworth, the EVP of global lodging-consultant giant PKF Hospitality Research.
“With RevPAR going up, and construction relatively flat, it’s hard to come up with a ‘negative story’ about our industry,” Woodworth told about 2,000 industry pros who attended Tuesday’s opening session.
The next few years will be even better, Woolford says, as the economy continues to mend. He also forecasts a 10% jump in sales over each of the next few years, as buy-and-hold owners who purchased their properties long ago sell to pay profits to their longtime investors and start to find new ones.
“It’s going to be a pretty healthy resale market” for the foreseeable future, Woolford says.
Stephen Joyce, president and CEO of Maryland-based Choice Hotels International—the corporate parent of Comfort Inn, Rodeway Inn, and several other familiar brands– agrees with Woolford that the rebounding economy will boost rental rates and occupancy levels in the months ahead.
“We’re going to have a ‘good run’ for the next few years,” Joyce says.
Yet, Joyce cautions that the growing strength of today’s hotel industry might lead to too much development a few years from now.
“We could see overbuilding in 2016 or 2017,” Joyce says, as hotel owners and investors become “‘over-exuberant about the market.”