U.S. RevPAR Volatility Index & Probability of Recession
While the probability of a recession has grown from 11.1% in May 2019 (forecasted in May 2018) to 29.6% in May 2020 as illustrated in the lower graph, our U.S. RevPAR Volatility Index remains in the first or lower quartile. Over the past thirty years or so, the index...
How Does Employment Growth Impact RevPAR Growth Across the Top 25 Hotel Markets?
Executive Summary RevPAR growth rates and employment growth rates over the 1987-2018 period for the Top 25 hotel markets were used to examine the relationship between employment growth and RevPAR growth. Our findings conclude that while employment growth contributes...
Hotel Efficiency Rankings, Targeted Peer-Based Improvements & Cost Savings for a 46 Hotel Portfolio
While U.S. hotel profits reached an all time high of $80 billion in 2018, many hotel owners and managers are now turning their attention to cost containment and revenue management initiatives as expenses, such as labor costs, have begun to grow at higher rates than...
Labor Productivity for Hotels & Motels in the US 1987-2017
The Lodging Industry Investment Council's recent annual survey found that 67% of LIIC members said that the major threat to hotel investments was low unemployment (availability of labor), a jump from 49% in 2018. In light of their concerns we thought it worthwhile to...
The Value of US Lodging Construction Spending 2002-2018 – A Perspective
The Lodging Industry Investment Council's recent annual survey found that 64% of respondents said that new lodging supply/general oversupply was the second greatest threat to their hotel investment in 2019. The first major threat, low unemployment (availability of...
Value-based Pricing for the US Lodging Industry
We recently completed a value-based pricing assignment for a client that owns several luxury hotels in the US. The hotels are located in highly competitive markets which were classified as such by the use of the Herfindahl-Hirschman Index. Each of the hotels were...
Growth in Star-Rated Hotel Room Supply by Star Rating & Indonesian Province 2009-2018
Our previous post, "Significant Growth in Indonesia's Star-Rated Hotel Supply 1985-2018", generated much discussion about how the growth at the provincial level was distributed among the star-ratings. In this post we have briefly reviewed the growth in rooms by star...
The Relationship Between the Cost of Living & Average Daily Rates in the Top 25 Hotel Markets – 2018
Have you ever wondered if there is a relationship between the average daily rate (ADR) achieved by a hotel market and the cost of living (COL) in that market? Based on our detailed econometric models, we know that real ADR (inflation adjusted) in any quarter, is a...
Winners and Losers in the Top 25 US Hotel Markets
The focus on monthly and yearly data by hotel managers and investors often masks trends that are shaping the investment horizon over longer periods. For this reason we have examined the best and worst performing markets over a typical holding period of eight years....
Hotel Sector Draws the Short Straw in Terms of Domestic Tourism Expenditure in Indonesia
Indonesia's hotel sector has drawn the short straw in terms of domestic tourism expenditure, capturing Rp 16.29 trillion or just 6.4% of total domestic expenditure of Rp 253.47 trillion in 2017. This compares with Rp 79.83 trillion or 40.1% of total foreign tourism...