LWHA: Transaction Volume Down, Florida Leads U.S. Activity

NEW YORK— Even though the U.S. hotel industry registered record-breaking performance levels during 2019, RevPAR growth was the lowest since the current cycle began in 2010, according to LW Hospitality Advisors’ (LWHA) 2019 Major U.S. Hotel Sales Survey. Amid hotel demand and supply growth in relative equilibrium, continued inventory growth of Airbnb and other professionalized short-term rental platforms has the lodging sector now grappling with a lack of pricing power. Numerous municipalities have implemented regulations that could curb the impact of some of this alternative rental inventory on the hotel sector.

The survey includes 164 single asset sale transactions over $10 million, none of which are part of a portfolio. These transactions totaled $17.7 billion and included approximately 48,800 hotel rooms with an average sale price per room of $363,000.

By comparison, the LWHA 2018 Major U.S. Hotel Sales Survey identified 208 transactions totaling roughly $18.3 billion including 51,100 hotel rooms with an average sale price per room of $357,000. By further comparison, the LWHA 2017 Major U.S. Hotel Sales Survey identified 182 transactions totaling roughly $13.6 billion including 51,000 hotel rooms with an average sale price per room of nearly $267,000.

Comparing 2019 with 2018, the number of trades decreased by approximately 21% while total dollar volume declined roughly 3.3% and sales price per room increased 1.9%.

Comparing 2018 with 2017, the number of trades increased by approximately 14% while total dollar volume rose roughly 35% and sales price per room increased by 34%.

Notable observations from the LWHA 2019 Major U.S. Hotel Sales Survey:

  • Florida has been the most active transaction market followed by California and New York with 18 and 12 trades, respectively.
  • Thirty-four of the 164, or 21% of 2019 U.S. hotel sale transactions, were for greater than $100 million each. Eighteen of the 2019 hotel trades were between $100 million and $199 million. Five of the 2019 hotel sales were between $200 million and $299 million.

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