HVS · 21 Oct

Government per diem rates are set for a number of locations, many applying to multiple regions or localities in each state. A per diem rate is made up of three components: a lodging allowance, meals allowance, and incidental expense allowance[1]; however, this article and the data presented below focus solely on the lodging allowance. The per diem lodging rates, which provide a maximum amount that a federal traveler can reimburse, are based on the costs of mid-priced hotels and are set annually by the U.S. General Services Administration (GSA). The following article examines the per diem trends of the top 24 lodging markets, as defined by STR, which reportedly make up roughly 32%[2] of the total number of hotel rooms across the country. Hawaii is typically included in this list of top lodging markets; however, it has been excluded because the per diem rates are only set for the continental states.

HVS · 23 Sep

In 2018/19, the national lodging market continued to climb to new heights, albeit at a more moderate pace than in previous years. In 2018, hotels in the United States operated at the highest occupancy and average rates ever recorded, with both metrics registering additional growth during the year-to-date July 2019 period. While the pace of new hotel development and the entrance of new supply has remained tamed when compared with the previous cycle, this pace has been accelerating, as evidence by increases in supply in 2018 and 2019, as well as the number of hotel rooms under construction as of mid-year 2019.

HVS · 17 May

Independent, budget motels are often operated by resident owners that are talented at running efficient, safe motel operations but lack sophisticated and complete financial models that generate proper reports upon which to base purchase and valuation decisions. It is important for a buyer to understand that available financial information may not tell the full story, and relying solely on what is available may sell short the profit potential of the hotel and, ultimately, its true value. In Part 1 of this series, I discuss the importance of deriving a proper revenue estimate and testing its reasonableness against the norms for the neighborhood and market.

HVS · 16 May

At the most basic level, the value of a hotel is based on the property’s net income divided by a capitalization rate. As such, one has two possible levers to adjust as a means of increasing a property’s value: either increase the property’s net income or decrease the capitalization rate.

HVS · 18 Mar

In 2018, the Canadian lodging market reached a new record high for RevPAR. Although regional performance differed widely, more developments are in the pipeline in 2018 that any year since 2013. After the global financial crisis hit the Canadian lodging market in 2009, causing a 12.3% contraction in RevPAR, the industry in general has been on an upward trajectory. In fact, RevPAR growth for the country has been registered for 106 consecutive months—the longest period of sustained growth on record.

HVS · 17 Jan

A possessory interest is created when a private-sector tenant is granted exclusive use of real property (land and/or building) that is owned by a tax-exempt entity, typically a municipality or a state or federal government agency. The right to occupy and use the land and/or building is usually conferred via a lease

HVS · 22 Nov

In 2017/18, the national lodging market continued to climb to new heights. In 2017, hotels in the United States operated at the highest occupancy and average rates ever recorded, with additional growth across both metrics in the 2018 year-to-date period. Hotel development activity correlates directly with the ebbs and flows of hotel-sector performance. As the market continued to reach a new peak for the current development cycle in 2017, developers pursued hotel construction and redevelopment at a pace not seen since 2006 and 2007, and the pipeline of new hotel projects gained momentum. HVS has tracked hotel development costs for the last three decades, collecting data from actual hotel cost budgets during our assignments. This year's sample reflects the largest sample HVS has analyzed given the number of hotels in the pipeline, as well as our growing presence in 40 U.S. markets. This 2017/18 survey reports per-room hotel development costs based on data compiled by HVS from hotel projects proposed or under construction during the 2017 calendar year. With the availability of more data, we elected to add a redevelopment category to account for projects that did not include ground-up construction, such as those that involved a complete renovation, conversion, or adaptive reuse. Thus, our data now reflect ten product categories: budget/economy, limited-service, midscale extended-stay, upscale extended-stay, dual-branded, select-service, full-service, lifestyle/soft-branded, redevelopment, and luxury hotels. The HVS Hotel Development Cost Survey sets forth averages of development costs in each defined lodging product category. The survey is not meant to be a comparative tool to calculate changes from year-to-year, but rather, it reflects the cost of building hotels across the United States in 2017. As will be discussed, the averages set forth in this survey are greatly affected by the types and locations of hotels being developed at this point in the development cycle. Our goal in sharing this publication is to provide a basis for developers, investors, consultants, and other market participants in evaluating hotel development projects. Given that development costs for hotels are dependent on a multitude of factors unique to each development and location, this report should not be relied upon to determine the cost for actual hotel projects or for valuation purposes, but rather, it is intended to provide support for preliminary or actual cost estimates, as well as to show a comparison across the various categories.