Arthur Adler, Managing Director and CEO - Americas
At the 32nd Annual NYU International Hospitality Industry Investment Conference, the mood is brighter than at previous conferences in recent memory. In the U.S., demand growth is back, though ADR growth remains elusive. The themes communicated at the “CEOs Check In” panel this morning, along with what I’m hearing from industry participants in our meetings, are very much resonated in the data revealed in our most recent bi-annual Hotel Investor Sentiment Survey.
Market optimism took a positive stride in our latest survey and investors’ hotel performance expectations for the next six months marked the biggest positive shift recorded in a single survey period. Investors’ sentiment for the next two years jumped to a three-year high. The survey findings parlay into today’s opening session where panelists expressed their expectation for a V-shaped recovery (as opposed to a U-shaped one). In terms of growth in fundamentals, panelists unequivocally stated the most optimistic outlook for New York, Washington, D.C., Boston and San Francisco.
Consistent with the viewpoints from this morning, investors’ ‘buy’ intentions dominate again for the first time since the onset of the downturn. Hotel markets are starting to heat up across the country. More than half of investors surveyed indicated that their main activity over the next six months will be buying. This marks an unmistakable trend.
Buyers are becoming more aggressive and are increasingly pricing in optimism on future cash flows, knowing they are still establishing a foothold at cyclically low purchase prices. The abundance of equity capital in the marketplace will further drive transactions. Panelists agreed that transactions are on the upswing and will continue to tick up throughout 2010 and beyond.
-Art
