Is the frozen hotel sales market about to thaw?
While temperatures across many parts of the country have signaled an early start to the summer season, so too is the action in the hotel sales marketing heating up, as buyers and sellers appear to be moving closer to agreement on pricing.
According to a new research report from Jones Lang LaSalle Hotels, FocusOn: Market Equilibrium Leading to Opportunities for Hotel Buyers and Sellers, hotel transaction volume totaled $1.8 billion through May 2010, or a 124% increase over the same period in 2009.
Much of the spike is due to the improving economy and bottoming hotel operating fundamentals, which appear to be bringing more buyers and sellers to market.
The report, released at the 32nd Annual NYU International Hospitality Industry Investment Conference last week, reveals that the U.S. hotel investment landscape is entering a period of market equilibrium where good deals and opportunities can be realized by both buyers and sellers.
“The outlook for hotel investors is on the upswing,” said Arthur Adler, managing director and CEO for Jones Lang LaSalle Hotels. “There is a clear consensus that values of hotel assets—ranging from select service properties to luxury hotels—firmed during the past three to six months, laying the foundation for a more congruous understanding of value.”
Current market dynamics are now favoring both buyers and sellers – buyers are showing signs of being more aggressive, while sellers are receiving a significant amount of attention due to pent-up demand.