RevPAR: What Goes Up, Must Come Down

ROSEMONT, IL-In many respects, the hotel industry is booming. In fact, the second half of 2013 included some of the busiest months in the history of the business. Hotel transactions and developments seem to be reaching a fever pitch. While that is encouraging in the sense that any lingering impacts from the last recession appear to be over and the hotel development engine is once again firing on all cylinders, there is a worrisome subtext: some important economic factors indicate we may already be approaching the next market peak. This might seem like a bold assertion given that the development momentum is a fairly recent phenomenon, and considering the fact that more than a few markets continue to lag behind the overall pace of growth. But the hotel industry is cyclical in nature, and savvy and experienced hotel investors and developers will recognize some familiar signs from the last time that booming development began the run-up to a bubble.

Good news—bad news