The Americas led the market drop, with an 81% decline from 2007 to 2008. However, the Asia Pacific had a 67% drop and Europe had a 59% drop for the same period. The transactions haven't been this low in the first half of a year since 2003. However, that time period had significant events, such as Sept. 11, the Iraq War and the SARS outbreak, which had direct effects on hotel sales, said Arthur de Haast, president of JLL Hotels, in a statement. "Based on year-to-year numbers, the hotel investment market in 2008 appears to be in a much stronger position relative to the 2002/2003 period," he said.

Also, according to the report, most transactions are less than $100 million in size, such as Strategic Hotels & Resorts Inc.'s sale of the Hyatt Regency Phoenix to Los Angeles-based DiNapoli Capital Partners for $96 million early last month. Portfolio sales are way down, especially compared to the first half of 2007, which had more than 12 transactions of more than $1 billion. The total number of hospitality sales hit a high of almost $120 billion overall in 2007.

There are some good points from the report, however. Pricing is still respectable, and there are emerging markets in Thailand, Vietnam, Russia and Turkey, according to the report. Also, demand is still strong, with buyers still outnumbering sellers by nearly 4 to 1. "With the weaker trading outlook anticipated for most markets, sellers are expected to start adjusting to new pricing levels," de Haast said in the report.

These figures are contrary to development figures. According to Lodging Econometrics, the first half has been a record year for new room growth, and the Middle East is booming with thousands of units planned.

Instant Insights /

Hotel Sales Drop 76% to $13.9B in First Half

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