Labor Cost Trends in 2020
Labor Cost Trends in 2020 — By Robert Mandelbaum, David W. Heath

CBRE Hotels · 2 Aug

Based on CBRE’s survey of monthly operating performance, U.S. hotels experienced a 58 percent decline in total hotel revenues from 2019 to 2020. This resulted in a decrease of 78 percent in profits at the Gross Operating Profit (GOP) level, along with a 107 percent fall off in Earnings Before Interest, Taxes, Depreciation, and Amortization.

Touring NCREIF's Property Total Return Index
Touring NCREIF's Property Total Return Index — By Jack B. Corgel

CBRE Hotels · 7 Jul

Hotel real estate investors need to measure both the absolute and relative financial performance of their properties. A 10% annual return may appear solid unless a collection of comparable investments earned 15%. Risk-adjusted returns measured against the appropriate index provide a way to assess managers’ abilities to generate excess returns. Measures of investment return come in many flavors.

Controlling Telecommunication Costs
Controlling Telecommunication Costs — By Robert Mandelbaum, Michael Kane

CBRE Hotels · 2 Jul

Although telecommunications costs account for a small percentage of expenses, data during 2015 through 2019 revealed a significant upward trend in telecom related expenditures. To achieve more efficient hotel operations and survive the changing landscape, hotel owners and operators are finding new ways to control telecommunications expenses.

The Growth In Management Fee Expense
The Growth In Management Fee Expense — By Robert Mandelbaum

CBRE Hotels · 1 May

In 2019, 86% of the hotels that participated in CBRE Hotels Research's annual Trends® in the Hotel Industry survey of property-level operating statements reported the payment of a management fee. On average, these hotels paid management fees equal to 3.6% of total operating revenue. The management fee to revenue ratio was the highest for convention hotels (4.1%) and lowest for resorts and full-service hotels (3.5%). Relative to the bottom line, total management fees averaged 13.9% of profits. For this analysis, profits are defined as earnings before interest, taxes, depreciation, and amortization (EBITDA).

Stay With Me: Hotel Owners Look Ahead to the Return of Leisure and Business Travel
Stay With Me: Hotel Owners Look Ahead to the Return of Leisure and Business Travel

CBRE Hotels · 29 Mar

As the hospitality industry awaits the return of travelers, the government's Paycheck Protection Program has helped many hotels weather the COVID-19

CBRE Hotels Experts Discuss The Short- And Long-Term Recovery Trajectory For The Lodging Industry
CBRE Hotels Experts Discuss The Short- And Long-Term Recovery Trajectory For The Lodging Industry

CBRE Hotels · 1 Sep

CBRE's Jamie Lane and Jack Corgel share their take on how the current remote work environment impacts travel demand and what that might mean for both

The Owner’s Obligation – Cash
The Owner’s Obligation – Cash — By Robert Mandelbaum

CBRE Hotels · 17 Aug

The COVID-19 virus has had an extreme negative impact on the U.S. lodging industry. According to CBRE's June 2020 edition of Hotel Horizons®, lodging demand in the U.S. will decline by 37.0 percent in 2020. This will cause a 38.0 percent drop in the national occupancy level, along with a 22.5 percent fall in average daily room rates (ADR). The net result is a projected 51.9 percent fall off in revenue per available room (RevPAR) for the year. Using historical data from the CBRE Trends® in the Hotel Industry database of operating statements, the most likely consequence of a 51.9 percent RevPAR decline is a Gross Operating Profits (GOP) decrease in excess of 80 percent.

Hotel Insurance Costs on the Rise
Hotel Insurance Costs on the Rise — By Robert Mandelbaum

CBRE Hotels · 21 Jul

As of the writing of this article we are in the early stages of evaluating the impact of the COVID-19 virus on the U.S. lodging industry. Owners and operators are discussing the potential use of business interruption insurance (BI) to cover expected losses in profits. Business interruption insurance covers the loss of income that a business suffers after a disaster. It is designed to put a business in the same financial position it would have been in if no loss had occurred. Owners and operators are encouraged to review their BI policies to determine if their businesses are covered from any losses attributable to the COVID-19 virus.

COVID-19’s Potential Lasting Impact on Fixed vs Variable Hotel Expense Ratios
COVID-19’s Potential Lasting Impact on Fixed vs Variable Hotel Expense Ratios — By Mark VanStekelenburg, Kannan Sankaran, Andrew Hartley, Vanessa Gonzalez

CBRE Hotels · 20 Jul

As a result of COVID-19, hotel operators have been forced to make tough decisions, including the most basic one on whether to keep the lights on. Many were required to close their doors after municipal mandates were put in place and some decided to remain open, despite record-low occupancy levels, to house pandemic-related first responders and other essential personnel related to the fallout from the spread of coronavirus, largely in place of more traditional sources of demand during "normal times".

Hotel Asset Management – In Good Times and Bad
Hotel Asset Management – In Good Times and Bad — By Hank Fonde

CBRE Hotels · 8 May

The practice of asset management for hotels entering the third decade of the 21st Century has evolved into an intricate process of analyzing layers of data and operating results, and then acting based upon the conclusions. The process requires great focus. Asset management is the practice of managing the value of the owner's investment. And now that process becomes more urgent, but also more important than ever before.

Operating Performance At Low Occupancy Levels
Operating Performance At Low Occupancy Levels — By Robert Mandelbaum

CBRE Hotels · 20 Apr

Since January 2020, CBRE Hotels Research has been analyzing the impact of the COVID-19 virus to understand how the societal and economic impacts of COVID-19 will influence the performance of U.S. hotels.

Examining changes in RevPAR, profit in past recessions
Examining changes in RevPAR, profit in past recessions — By Robert Mandelbaum

CBRE Hotels · 16 Apr

CBRE Hotels Research was projecting a 1.1% increase in revenue per available room for the year. Even with this low level of revenue growth, there were certain factors that could have sustained—or at least cushioned the blow of minimal declines—the nine-year trend of profit growth for U.S. hotels since 2010.

Resort Fees – A Growing Source of Revenue
Resort Fees – A Growing Source of Revenue — By Robert Mandelbaum

CBRE Hotels · 17 Mar

The 11th edition of the Uniform System of Accounts for the Lodging Industry (USALI) defines resort fees as, "mandatory fees charged at either a flat amount or a percentage of the room rate." These fees are frequently intended to cover services such as fitness facilities, spas, pools, local phone calls, Internet access, airport transportation, and golf driving ranges, among other recreational facilities.

Luxury Hotels: Elevated Occupancy and Expenses
Luxury Hotels: Elevated Occupancy and Expenses — By Robert Mandelbaum, Mark R. Woodworth

CBRE Hotels · 17 Dec

Despite the relatively high cost of construction and complexity of operations, developers are still attracted to owning and managing luxury hotels. As of August 2019, STR reports that just 0.7 percent of the hotels (2.3% of rooms) in the United States are chain-affiliated luxury hotels. Concurrently, the STR pipeline report shows that 1.2 percent of the properties (2.9% of rooms) either under construction or planned for development meet this criterion.

What Happens When Government Per Diems Change?
What Happens When Government Per Diems Change? — By Bram Gallagher, Aman Patel

CBRE Hotels · 19 Nov

Because federal government employees purchase a significant quantity of hotel rooms, the General Services Administration (GSA) has partnered with Federal Travel Regulation (FTR) compliant accommodations to provide federal travelers with per diem hotel room rates for select high-volume travel destinations in and outside of the Continental United States. These federal guidelines frequently serve to determine the hotel per diem allowances for state and local government travelers as well.

How Changes in Hotel Revenues Suggest Changes in Guest Preferences
How Changes in Hotel Revenues Suggest Changes in Guest Preferences — By Robert Mandelbaum

CBRE Hotels · 22 Oct

From the high-tech preferences of Generation Z, to the experiential fondness of Millennials, to the health and wellness realities facing Baby Boomers, hotels continually adjust the amenities and services they offer to satisfy their guests. These adjustments are based on extensive consumer research, much of which has been published in the lodging industry trade publications.

Hotel Statements: A Model of Profit Maximizing Premia and Discounts
Hotel Statements: A Model of Profit Maximizing Premia and Discounts — By Bram Gallagher

CBRE Hotels · 18 Oct

Rooms revenue per available room, reported as RevPAR, is perhaps the most scrutinized performance indicator in the hotel business. Although the true aim of a hotel's operation is to maximize profit, the wide availability and frequent reporting of RevPAR may make revenue the hotel manager's most immediate target. Revenue-maximizing is simpler to estimate and requires less information than profit-maximizing.

Special Edition CBRE Lodging Insights; Watch the Trade Winds
Special Edition CBRE Lodging Insights; Watch the Trade Winds

CBRE Hotels · 4 Oct

CBRE's Mark Woodworth sits down with our Global Chief Economist & Head of Americas Research, Richard Barkham. Topics discussed included the state of

Managing RevPAR For Profits
Managing RevPAR For Profits — By Robert Mandelbaum, Bram Gallagher

CBRE Hotels · 18 Sep

Per the name, the historical role of revenue managers has been to maximize revenue - specifically rooms revenue or RevPAR. RevPAR growth is achieved by increasing occupancy and/or average daily rates (ADR).

U.S. Hotel Cap Rate Survey - First Half 2019
U.S. Hotel Cap Rate Survey - First Half 2019

CBRE Hotels · 30 Aug

CBRE is pleased to present its semiannual North America Cap Rate Survey for H1 2019, which reveals cap rates and pricing trends for hotel property ty