Transaction Volume Should Better $30 Billion

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The global hotel transaction volume forecast from Jones Lang LaSalle Hotels on Thursday was for $30 billion, the same total reached last year. The global hotel investment services firm said volume would “hold steady.” Yes, by definition that means deals will be flat, a year without any growth, but describing it in those terms makes it seem just OK.

But I think that's selling the total and the year the industry saw in 2011 short. Considering where lodging has been the last three years, a 13% increase over 2010's rebound from the decades-worst $9.8 billion in 2009 is significant. Last year was marked by ups and downs, but operating fundamentals improved almost every month and values and transaction volume rose as well.

The biggest question mark was and remains the capital markets, but a sovereign debt crisis and the S&P's downgrading of U.S. debt didn't completely derail deal activity.

If I was (still) a betting man and the projection was the total and I had to choose over or under, I'd say over without hesitation. I think $30 billion would be another strong year, but I think it will be even better.

Sure, there will be continued concerns over the global economy, but there were this year and the industry didn't fall apart. There's more distress looming, more credit coming and revenues continue to improve — a recipe I think adds up to more deals. I wouldn't be surprised if we see a few large portfolio sales and even a brand changing hands.

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