How Hotel Sales Performed in Q3

Today’s global travel sector, which many characterize as being “on the brink of collapse,” is simply unprecedented.  Seven months into a 100-year worldwide pandemic which caused a swift, wide, and deep economic recession has decimated key travel and leisure related industries including airlines, car rentals, cruise lines, ridesharing, and tour operators.  While stock markets have rebounded to near record levels, the US lodging industry continues to experience crippling stress as travel demand, which has experienced a sharp and sustained decline, continues to significantly lag pre-pandemic levels.  Although most segments of lodging demand came to an abrupt halt during the COVID-19 crisis, hotels located in urban markets, particularly group and meeting/convention-oriented properties, have been most negatively impacted and will likely take the longest period to recover.

The LW Hospitality Advisors (LWHA) Q3 2020 Major U.S. Hotel Sales Survey includes 12 single asset sale transactions over $10 million, none of which are part of a portfolio. These transactions totaled $829 million and included approximately 2,700 hotel rooms with an average sale price per room of $306,000. By comparison, the LWHA Q3 2019 Major U.S. Hotel Sales Survey identified 40 transactions totaling roughly $3.725 billion including 13,100 hotel rooms with an average sale price per room of nearly $283,000.  Comparing Q3 2020 with Q3 2019, the number of trades decreased by approximately 70 percent while total dollar volume declined roughly 78 percent and sales price per room increased by roughly 8 percent.