WASHINGTON—CoStar Group Inc. plans to acquire STR for $450 million in cash. The transaction is expected to close in the fourth quarter of this year.
“The STR team has built an extraordinary company that partners with the hotel industry to create benchmarks and analytics that are the primary tools hotel management and investors rely on to optimize and improve their assets,” said Andrew C. Florance, founder/CEO, CoStar Group. “STR brings an unrivaled reputation within the global hospitality industry for their data integrity, reliability and strict confidentiality, and we look forward to continuing to build on these core values in the next chapter of STR’s growth.”
STR was founded in 1985 as Smith Travel Research to provide performance benchmarking and comparative analytics to hotels. Over the past 34 years, STR has grown its data assets, product offerings and geographic reach for premium data analytics, performance benchmarking and market insights. Today, STR aggregates data from more than 65,000 hotels worldwide, representing nearly nine million guestrooms in over 180 countries. The company’s flagship product—the STAR report—provides hotel brands, owners and management companies performance benchmark information with more than 1.2 million reports distributed each month. STR is headquartered in Hendersonville, TN, and has 370 employees in 15 countries.
The value of the STR benchmarks extends well beyond optimizing hotel operations. Valued at over $3 trillion globally, hotels are a massive commercial real estate asset class. In the way that CoStar’s acquisition of Apartments.com enabled CoStar to extend valuable new services to investors and service providers in multifamily real estate, the company believes that STR will complement its existing offerings and empower it to provide valuable new services to investors and service providers in the hospitality industry.
CoStar currently provides basic building information on 80,000 hotels, 45,000 hotel sale comparables, and 4,500 hotels offered for sale. Among many other things, STR’s information provides aggregated anonymized information on occupancy rates, average room rates, and RevPAR. The company believes that the combination of the two companies’ offerings will allow it to create valuable new and improved tools for investors, lenders and service providers for use in developing, financing, valuing and selling hotel properties.