According to Smith Travel Research, a significant rate uptick has occurred. See chart below:
Rate Increase Chart
Thursday, March 25, 2010
Monday, March 15, 2010
Video Post on Hotel Brokerage in N. CA by Mark Woodworth
Please click on the Video post by Mark Woodworth....http://www.pkfc.com/en/videos/HorizonsUpdate/default.aspx .
Please leave your comments.
Please leave your comments.
Saturday, March 6, 2010
Monday, March 1, 2010
LODI INN....Closes! Second PKF Capital transaction in 60 days!
PKF Capital Sacramento assisted the seller in closing escrow on the The Lodi Inn on March 1, 2010. The former Holiday Inn Express, closed for $3,100,000.
The buyer will be converting the property to a Motel 6. It will feature the new Phoenix Design.
To learn more details about the transaction, please call Dan Hayward at 916-830-2622.
The buyer will be converting the property to a Motel 6. It will feature the new Phoenix Design.
To learn more details about the transaction, please call Dan Hayward at 916-830-2622.
Saturday, February 27, 2010
TripAdvisor...Live by the Sword...Die by the Sword
Seemingly, hotel properties are at the mercy of the traveling public. What do you as an owner do to combat bad reviews on www.tripadvisor.com?
First off, put yourself in the customers shoes. Try looking at the situation (as they describe it)and figure out how you would react.
Secondly, respond. You have got to engage the customer on email or phone to see if there is anyway to resolve the situation.
Thirdly, ask the customer to re-post on the web site so the traveling public can see that you take these situations to heart.
Fourthly, you need to design a plan of action against that type of review happening again. This plan needs to be put in motion 24/7/52 not just that next week.
Fifthly, ask customers to post their thoughts on TripAdvisor and be prepared for what you are getting into.
Finally, follow your property on TripAdvisor. Take full advantage of the site.
First off, put yourself in the customers shoes. Try looking at the situation (as they describe it)and figure out how you would react.
Secondly, respond. You have got to engage the customer on email or phone to see if there is anyway to resolve the situation.
Thirdly, ask the customer to re-post on the web site so the traveling public can see that you take these situations to heart.
Fourthly, you need to design a plan of action against that type of review happening again. This plan needs to be put in motion 24/7/52 not just that next week.
Fifthly, ask customers to post their thoughts on TripAdvisor and be prepared for what you are getting into.
Finally, follow your property on TripAdvisor. Take full advantage of the site.
Friday, February 26, 2010
Interested in a Personalize Market Analysis?
San Francisco rates take a dive......
San Francisco visitors have been enjoying some great hotel rates, thanks to the bad economy, the San Francisco Chronicle reports today.
Whether they're coming to attend a conference at the Moscone Convention Center, visit the city's many art museums or hang out in North Beach, visitors paid an average of just $160 a night last year - vs. $190 in 2008, the story says. And the 16% year-over-year reduction represents the steepest, annual drop-off since the Great Depression, according to the story, which cites historical data from industry tracker PKF Consulting.
Prices in San Francisco started falling toward the end of 2008. In June, the average room in the city cost $134 a night - the lowest it had been since 2005. In December, the average rate sank even more, to $132, the story says.
And interestingly, the Chronicle notes, more affordable hotel rates didn't attract more guests. San Francisco filled 76% of rooms last year, or about 4% fewer than the year before. In December, the city filled just 65% of rooms, the story says.
With the drop in room rates, the value of hotels has also plummeted. At least 15 hotel owners have defaulted on loans, including the Stanford Court and the Four Seasons, the story says.
Whether they're coming to attend a conference at the Moscone Convention Center, visit the city's many art museums or hang out in North Beach, visitors paid an average of just $160 a night last year - vs. $190 in 2008, the story says. And the 16% year-over-year reduction represents the steepest, annual drop-off since the Great Depression, according to the story, which cites historical data from industry tracker PKF Consulting.
Prices in San Francisco started falling toward the end of 2008. In June, the average room in the city cost $134 a night - the lowest it had been since 2005. In December, the average rate sank even more, to $132, the story says.
And interestingly, the Chronicle notes, more affordable hotel rates didn't attract more guests. San Francisco filled 76% of rooms last year, or about 4% fewer than the year before. In December, the city filled just 65% of rooms, the story says.
With the drop in room rates, the value of hotels has also plummeted. At least 15 hotel owners have defaulted on loans, including the Stanford Court and the Four Seasons, the story says.
Great Article discussing Electronic Marketing for Independant Hotels
For many independent hotels, electronically generated sales are the only viable tools to compete with franchised hotels.
Yet, there are still many independent hoteliers who think that volume electronic sales are out of reach, too costly or too complicated to implement.
Perhaps the most frequently asked question I hear is “I know about electronic sales, but where do I start?” Start with a commitment to do more than simply hire someone to design a website. There are several elements involved to create and maintain a successful electronic sales program.
The primary three are the Global Distribution System, the Internet, and third-party travel aggregators.
Hotel Website Basics Revisited
In the last few years, hotel web site development has matured tremendously. Gone are the days of web sites designed by the office techie, ad agency, or by some company picked out of the yellow pages. Knowledge of hotel marketing has become a necessary ingredient in the process.
We’ve learned that there are several important factors involved in the design of an effective and productive web site; knowledge of how search engines function; utilization of hotel marketing techniques in the overall design; the great importance of text content; and that flashy design may be attractive, but seldom works well on hotel sites.
In the past few years, we’ve learned that search engine optimization is worthless unless the site’s design has first been optimized. Please do not believe that hiring someone to perform SEO, without first maximizing the functionality of your site, will do anything to help productivity. More people may find your site, but the primary goal is for them to make a reservation; not simply visit. Website content is king.
Website design optimization requires knowledge of how and why people choose hotels on the Internet; how visitors read and evaluate site data; the technical requirements necessary for search engines to find your website; and ways to improve your chances of success against your competition set.
It’s not rocket science, but it does take some technical and marketing knowledge. Many owners and managers still judge their hotel’s web site by its aesthetic values instead of how well it functions. For those who are content with simply having an attractive website, instead of a functional site which produces reservations, sit-back, relax, stop reading, you won’t read anything of interest here.
Online Booking Engines
With the sophistication and affordability of today’s online booking engines, there is absolutely no excuse for not having one on your web site. Simply trying to impose your will on visitors to phone or email their reservation requests will not cause them to do so.
The majority of online visitors want the gratification of making an online “real-time” reservation with an instant confirmation to complete the transaction. I’ve heard all the typical excuses such as “we want to give people personalized service by making them call us” is hogwash. People who believe this simply don’t understand the online traveler. Will some visitors see your site and then call to make a reservation, sure, but how about the many visitors who won’t?
Most people today don’t want to deal with busy phone lines, being placed immediately on hold or the dreaded unanswered call and sending an emailed information sheet into never, never net-land has too much uncertainty for most people.
For those of you who are concerned about the expense, booking engines are very affordable. With most, the return-on-investment is only one or two reservations a month. Shop around for the best booking engine for your hotel. Some are better than others in function and use; some are better for International feeder-markets than others.
Simplicity is important. Before you commit to a booking engine, try it out. How many clicks are necessary; evaluate the navigation; can they design it to look like it's a part of your website? Does the booking engine charge a commission or booking fees? The best engines charge a simple flat monthly fee.
Web 2.0 Social Media
By now, just about every hotelier has discovered social media, although most still have no idea how to use it to drive business. It's fun, free, and easy to work with and that partially explains its popularity. With few exceptions, hotels are participating, but even fewer have seen any measurable results.
Social media can benefit hotels in the form of search results and link development. Social media blogs, created and maintained by hotels, can show tremendous search and link results. But, don't kid yourself, maintaining a blog takes skill and a lot of hard work; it's better done by professionals.
Electronic Marketing
Electronic marketing has evolved from a novelty, just a few years ago, into a necessity since the early days of the 90’s; especially for independent hotels. Its affordability and effectiveness, compared to the marketing days of old, make electronic marketing the best value of our time.
Franchised hotels have taken the GDS for granted, ever since most franchises began to deliver GDS production automatically through their reservation systems. Although production from GDS travel agents has been negatively impacted by the Internet, their potential production could help to supplement any hotel’s top-line.
The GDS is available through official GDS providers; one of the best is Genares.com. You can find more on the Internet. Independent hotels need to take advantage of the Global Distribution System also for exposure to third-party travel business. Being online with the GDS automatically gets your hotel listed with third-party giants like Expedia, Travelocity, and Orbitz; powerful room producers.
First, put aside all those horrible stories you may have heard during the franchise-brand/third-party war of a few years ago. Those days are in the past. Third-party travel aggregators can produce valuable room nights and unprecedented world-wide exposure you could never obtain on your own.
Choose a partner among the top third-party aggregators and form a relationship. Some of them have special partner programs designed to pump needed business to your hotel. Through managing rates and inventory, these marketers can provide your hotel with a base of business, which can enable you to leverage sales and increase your revenue-per-available room.
If no one on your staff knows how it works, get them educated by an expert. The return-on-your-investment can be huge. There are many knowledgeable hotel consultants who can coach your team in this invaluable market.
Revenue Management
Hotel Revenue management has many faces. No matter how you apply it to your hotel, revenue management can reap great rewards, if done properly. The basic principle of revenue management is that your occupancy will consist of several layers or types of business. Creating the maximum or optimal mix of business for your hotel is the key to profitability.
We know that each type of business will produce varying levels of rates. Rack rate business, corporate travelers, motor coach business, leisure travelers, and others all have different levels of rate tolerance. Revenue management can maximize occupancy and average rate.
Creating a base of lower-rated business will allow you to appropriately close lower rates as room supply diminishes and allow higher rates to kick-in. Remember, average rate is not what you sell some rooms for; it’s what you sell all your rooms for. The goal is not 100% occupancy; the goal is to sell as many rooms as possible, at the highest rates possible.
The relationship between revenue management and electronic sales is obvious. Utilizing all forms of electronic sales can create that base of business which will allow you to get better rates from call-ins and walk-ins. Reach-out and take advantage of opportunity.
Electronic marketing is here to stay, but it's changing and improving every day. We need to change and improve with it.
Yet, there are still many independent hoteliers who think that volume electronic sales are out of reach, too costly or too complicated to implement.
Perhaps the most frequently asked question I hear is “I know about electronic sales, but where do I start?” Start with a commitment to do more than simply hire someone to design a website. There are several elements involved to create and maintain a successful electronic sales program.
The primary three are the Global Distribution System, the Internet, and third-party travel aggregators.
Hotel Website Basics Revisited
In the last few years, hotel web site development has matured tremendously. Gone are the days of web sites designed by the office techie, ad agency, or by some company picked out of the yellow pages. Knowledge of hotel marketing has become a necessary ingredient in the process.
We’ve learned that there are several important factors involved in the design of an effective and productive web site; knowledge of how search engines function; utilization of hotel marketing techniques in the overall design; the great importance of text content; and that flashy design may be attractive, but seldom works well on hotel sites.
In the past few years, we’ve learned that search engine optimization is worthless unless the site’s design has first been optimized. Please do not believe that hiring someone to perform SEO, without first maximizing the functionality of your site, will do anything to help productivity. More people may find your site, but the primary goal is for them to make a reservation; not simply visit. Website content is king.
Website design optimization requires knowledge of how and why people choose hotels on the Internet; how visitors read and evaluate site data; the technical requirements necessary for search engines to find your website; and ways to improve your chances of success against your competition set.
It’s not rocket science, but it does take some technical and marketing knowledge. Many owners and managers still judge their hotel’s web site by its aesthetic values instead of how well it functions. For those who are content with simply having an attractive website, instead of a functional site which produces reservations, sit-back, relax, stop reading, you won’t read anything of interest here.
Online Booking Engines
With the sophistication and affordability of today’s online booking engines, there is absolutely no excuse for not having one on your web site. Simply trying to impose your will on visitors to phone or email their reservation requests will not cause them to do so.
The majority of online visitors want the gratification of making an online “real-time” reservation with an instant confirmation to complete the transaction. I’ve heard all the typical excuses such as “we want to give people personalized service by making them call us” is hogwash. People who believe this simply don’t understand the online traveler. Will some visitors see your site and then call to make a reservation, sure, but how about the many visitors who won’t?
Most people today don’t want to deal with busy phone lines, being placed immediately on hold or the dreaded unanswered call and sending an emailed information sheet into never, never net-land has too much uncertainty for most people.
For those of you who are concerned about the expense, booking engines are very affordable. With most, the return-on-investment is only one or two reservations a month. Shop around for the best booking engine for your hotel. Some are better than others in function and use; some are better for International feeder-markets than others.
Simplicity is important. Before you commit to a booking engine, try it out. How many clicks are necessary; evaluate the navigation; can they design it to look like it's a part of your website? Does the booking engine charge a commission or booking fees? The best engines charge a simple flat monthly fee.
Web 2.0 Social Media
By now, just about every hotelier has discovered social media, although most still have no idea how to use it to drive business. It's fun, free, and easy to work with and that partially explains its popularity. With few exceptions, hotels are participating, but even fewer have seen any measurable results.
Social media can benefit hotels in the form of search results and link development. Social media blogs, created and maintained by hotels, can show tremendous search and link results. But, don't kid yourself, maintaining a blog takes skill and a lot of hard work; it's better done by professionals.
Electronic Marketing
Electronic marketing has evolved from a novelty, just a few years ago, into a necessity since the early days of the 90’s; especially for independent hotels. Its affordability and effectiveness, compared to the marketing days of old, make electronic marketing the best value of our time.
Franchised hotels have taken the GDS for granted, ever since most franchises began to deliver GDS production automatically through their reservation systems. Although production from GDS travel agents has been negatively impacted by the Internet, their potential production could help to supplement any hotel’s top-line.
The GDS is available through official GDS providers; one of the best is Genares.com. You can find more on the Internet. Independent hotels need to take advantage of the Global Distribution System also for exposure to third-party travel business. Being online with the GDS automatically gets your hotel listed with third-party giants like Expedia, Travelocity, and Orbitz; powerful room producers.
First, put aside all those horrible stories you may have heard during the franchise-brand/third-party war of a few years ago. Those days are in the past. Third-party travel aggregators can produce valuable room nights and unprecedented world-wide exposure you could never obtain on your own.
Choose a partner among the top third-party aggregators and form a relationship. Some of them have special partner programs designed to pump needed business to your hotel. Through managing rates and inventory, these marketers can provide your hotel with a base of business, which can enable you to leverage sales and increase your revenue-per-available room.
If no one on your staff knows how it works, get them educated by an expert. The return-on-your-investment can be huge. There are many knowledgeable hotel consultants who can coach your team in this invaluable market.
Revenue Management
Hotel Revenue management has many faces. No matter how you apply it to your hotel, revenue management can reap great rewards, if done properly. The basic principle of revenue management is that your occupancy will consist of several layers or types of business. Creating the maximum or optimal mix of business for your hotel is the key to profitability.
We know that each type of business will produce varying levels of rates. Rack rate business, corporate travelers, motor coach business, leisure travelers, and others all have different levels of rate tolerance. Revenue management can maximize occupancy and average rate.
Creating a base of lower-rated business will allow you to appropriately close lower rates as room supply diminishes and allow higher rates to kick-in. Remember, average rate is not what you sell some rooms for; it’s what you sell all your rooms for. The goal is not 100% occupancy; the goal is to sell as many rooms as possible, at the highest rates possible.
The relationship between revenue management and electronic sales is obvious. Utilizing all forms of electronic sales can create that base of business which will allow you to get better rates from call-ins and walk-ins. Reach-out and take advantage of opportunity.
Electronic marketing is here to stay, but it's changing and improving every day. We need to change and improve with it.
A Hotel that PKF Capital sold converts to Starwood Brand
Khanna Enterprises has converted the Hotel Montgomery here to Starwood Hotels & Resorts Worldwide's Four Points by Sheraton brand.
The hotel, which includes 1,500-square feet of meeting space, is within walking distance of the San Jose McEnery Convention Center and other downtown attractions.
The hotel, which includes 1,500-square feet of meeting space, is within walking distance of the San Jose McEnery Convention Center and other downtown attractions.
Thursday, February 25, 2010
What the heck is GOPPAR?
I was doing a little reading on-line today and ran across a term I had never seen before - GOPPAR. I had to do a little bit of digging to find a definition. Rather than me explain it myself, check out the light reading below.....
------------------------------------------------------------------------------------
GOPPAR
Gross operating profit per available room (GOPPAR), is a measure of the profit made by hotels. It relates profit to capacity. Unlike revpar it takes into account that fact that hotels make much of their profit from activities other than providing rooms - food and beverage sales are particularly important.
The biggest objection to GOPPAR is that meaningful comparisons of GOPPAR between different hotels is even more difficult than comparisons of revpar. The proportion of profits from food and beverage sales is much higher for more upmarket hotels. It will also vary with location and the facilities offered by a particular location. A large five star hotel in a rural location that appeals to tourists, is far better able to make food and beverage sales than a budget hotel in a city centre well supplied with bars and restaurants.
GOPPAR is also measured at a level that is subject to significant operational gearing, so small changes in occupancy or rates will only lead to proportionate changes in revpar, but much larger changes in GOPPAR.
For these reasons GOPPAR is usually more useful for internal use than for investors. It is not, in any case, sufficiently widely disclosed to be of much use in inter-company comparisons. If it is disclosed, it may be useful for year-on-year comparisons.
------------------------------------------------------------------------------------
GOPPAR
Gross operating profit per available room (GOPPAR), is a measure of the profit made by hotels. It relates profit to capacity. Unlike revpar it takes into account that fact that hotels make much of their profit from activities other than providing rooms - food and beverage sales are particularly important.
The biggest objection to GOPPAR is that meaningful comparisons of GOPPAR between different hotels is even more difficult than comparisons of revpar. The proportion of profits from food and beverage sales is much higher for more upmarket hotels. It will also vary with location and the facilities offered by a particular location. A large five star hotel in a rural location that appeals to tourists, is far better able to make food and beverage sales than a budget hotel in a city centre well supplied with bars and restaurants.
GOPPAR is also measured at a level that is subject to significant operational gearing, so small changes in occupancy or rates will only lead to proportionate changes in revpar, but much larger changes in GOPPAR.
For these reasons GOPPAR is usually more useful for internal use than for investors. It is not, in any case, sufficiently widely disclosed to be of much use in inter-company comparisons. If it is disclosed, it may be useful for year-on-year comparisons.
Monday, February 22, 2010
Clean the World - How can you as a Hotelier Get Involved?
Clean the World, http://www.cleantheworld.org/ , is a non-profit devoted to providing recycle soap to impoverished nations for the purpose of preventing millions of deaths caused by hygiene related illnesses every day.
The recycled soap comes from hotels that donated their used and un-used soap. I am going to see if I can help them get established on the West Coast. I would like to see all Central Valley hotels get involved.
Interested? Call me at 916-830-2622
The recycled soap comes from hotels that donated their used and un-used soap. I am going to see if I can help them get established on the West Coast. I would like to see all Central Valley hotels get involved.
Interested? Call me at 916-830-2622
Saturday, February 20, 2010
New PKF Hospitality Research Forecast
The forecasting arm of PKF Capital, PKF Hospitality Research, has come out with their December 2009 - February 2010 National Horizon report. The highlights are this:
*For 2010, PKF HR is projecting the pace of supply to slow down to 1.5%
*Hotel demand is forecast to increase to 1.9 resulting in a 0.4 percent rise in Occ.
*The net result is a 2010 forecast decline in RevPar of just 1.1%. RevPar will not increase until 2011 when the surge of supply has tapered off.
PKF HR does follow the top 50 markets in the US. If you would like to learn more about your market and what the projections are, please call me at 916-830-2622.
Dan Hayward
PKF Capital
Senior Managing Director
Sacramento Office
*For 2010, PKF HR is projecting the pace of supply to slow down to 1.5%
*Hotel demand is forecast to increase to 1.9 resulting in a 0.4 percent rise in Occ.
*The net result is a 2010 forecast decline in RevPar of just 1.1%. RevPar will not increase until 2011 when the surge of supply has tapered off.
PKF HR does follow the top 50 markets in the US. If you would like to learn more about your market and what the projections are, please call me at 916-830-2622.
Dan Hayward
PKF Capital
Senior Managing Director
Sacramento Office
Monday, February 15, 2010
Hotels That Are in the Northern CA Market
So you think there are a lot of Bank Owned Properties on the Market - there are. You need to get connected to those? Call me - 916-830-2622. Additionally, I can connect you to the Seattle, S.F., L.A., Dallas, Houston and Miami markets.
Here is what I have on the Market.
Hampton Inn and Suites
Hilton Garden Inn
Holiday Inn Express
Hawthorn Inn and Suites
Holiday Inn Express
Hampton Inn and Suites
Holiday Inn Express
Vagabond Inn
SpringHill Suites by Marriott
You want to get in front of these hotels as well as Bank Owned properties - call me at 916-830-2622.
Here is what I have on the Market.
Hampton Inn and Suites
Hilton Garden Inn
Holiday Inn Express
Hawthorn Inn and Suites
Holiday Inn Express
Hampton Inn and Suites
Holiday Inn Express
Vagabond Inn
SpringHill Suites by Marriott
You want to get in front of these hotels as well as Bank Owned properties - call me at 916-830-2622.
Can going GREEN improve your ROI?
Can you improve your ROI by Going Green? The AHLA has put out a great web site. Check it out http://www.ahla.com/green.aspx .
Wednesday, February 10, 2010
Are You Effectively Marketing Your Hotel?
During this time of challenging Occupancy and ADR how are you marketing your property to the business and leisure travelers? (I am assuming that you have enough experience to know that NOW is NOT is the time to cut back on Sales and Marketing; now you need to ramp up your presence so you can continue to dominate the market.) What are the tools at that are available to you?
Web Site
GDS
Third Party Aggregators
Social Media
20th Century Marketing Tools
Lets look at each.....
The web site is the cornerstone to your online presence. This is not your paper brochure migrated to an electronic version; it needs to be interactive. "Content is King" on any site (where have you heard this before) but the site should be organized in a very simplistic manner. A hotel web site would not be complete if it did not have a booking engine.
The GDS (Global Distribution System) is simply the system that travel agents use to book business into your property. Depending where you are located, this can be huge. Eventhough you may not like paying the TA fees, they are your alley in this tour environment. Use it!
The use of Facebook, Twitter and a Blog are becoming a neccessity to reach the mobile traveler. Are you monitoring Trip Advisors RSS feed? The key to Social Media is to stay on top of it. Use Facebook as a way promoting your property, encourage people to tweet about their stay at your propety (remember not every experience is good), use mobile coupons (do these really exist?)
What 20th Century Marketing tools worked.....AAA Book, Brochures, Coupon Books, Director of Sales, etc. These tools are cheap and thus need to be exploited.
Good Luck
Web Site
GDS
Third Party Aggregators
Social Media
20th Century Marketing Tools
Lets look at each.....
The web site is the cornerstone to your online presence. This is not your paper brochure migrated to an electronic version; it needs to be interactive. "Content is King" on any site (where have you heard this before) but the site should be organized in a very simplistic manner. A hotel web site would not be complete if it did not have a booking engine.
The GDS (Global Distribution System) is simply the system that travel agents use to book business into your property. Depending where you are located, this can be huge. Eventhough you may not like paying the TA fees, they are your alley in this tour environment. Use it!
The use of Facebook, Twitter and a Blog are becoming a neccessity to reach the mobile traveler. Are you monitoring Trip Advisors RSS feed? The key to Social Media is to stay on top of it. Use Facebook as a way promoting your property, encourage people to tweet about their stay at your propety (remember not every experience is good), use mobile coupons (do these really exist?)
What 20th Century Marketing tools worked.....AAA Book, Brochures, Coupon Books, Director of Sales, etc. These tools are cheap and thus need to be exploited.
Good Luck
Thursday, February 4, 2010
Business Travelers are Starting to Hit the Road Again?
It's seems like there is more news every week about the return of the Business Traveler. This is great news to hoteliers among others. Starwood Hotels and Resorts is boosting their 2010 outlook due to their optimism that the Road Warrior is BACK!
Starwood is projecting that their growth would be flat to up 5 percent this year; this is a change in their current outlook which was flat to negative 5 percent. On this news alone, Starwood's shares jumped 5 percent to $37.21.
To view the Reuters "U.S. Hotel Sector Performance" graph, please go to: http://graphics.thomsonreuters.com/0210/US_HOTELS0210.gif .
The graph points out the relationship between the Dow Jones Hotel Index and the month over month percent changes.
The industry is coming back!! Those out there that think there are great acquisition deals to be had, I would move quickly. This positive outlook is going to give sellers a reason to stay in and ride it out.
Call me if you have any questions or would like to discuss any acquisition / disposition deals.
Dan Hayward
PKF Capital
Sacramento, CA
916-830-2622
dan.hayward@pkfc.com
Starwood is projecting that their growth would be flat to up 5 percent this year; this is a change in their current outlook which was flat to negative 5 percent. On this news alone, Starwood's shares jumped 5 percent to $37.21.
To view the Reuters "U.S. Hotel Sector Performance" graph, please go to: http://graphics.thomsonreuters.com/0210/US_HOTELS0210.gif .
The graph points out the relationship between the Dow Jones Hotel Index and the month over month percent changes.
The industry is coming back!! Those out there that think there are great acquisition deals to be had, I would move quickly. This positive outlook is going to give sellers a reason to stay in and ride it out.
Call me if you have any questions or would like to discuss any acquisition / disposition deals.
Dan Hayward
PKF Capital
Sacramento, CA
916-830-2622
dan.hayward@pkfc.com
Monday, February 1, 2010
GREAT ARTICLE BY MARK ANDERSON OF THE SACRAMENTO BUSINESS JOURNAL ABOUT THE NEW HYATT PLACE IN ROSEVILLE, CA AND THE OVERALL MARKET. QUOTES FROM PKF CAPITAL AND PKF CONSULTING.
Hyatt Place checks in to slow Placer Hotel Market
Sacramento Business Journal by Mark Anderson Staff writer
A Hyatt Place hotel is opening in Roseville next week, smack-dab in the midst of one of the
weakest lodging markets in history. The good news for the upscale 151-room Hyatt is its location — a bustling section of Roseville adjacent to the Galleria at Roseville mall and The Fountains shopping center. The $25 million hotel broke ground in July 2008, during what was then the worst lodging market in years, said Scott Brown, chief executive of ABA Development in Larkspur, developer of the project.
At the time, economic forecasts predicted a nine- to 12-month recovery for the lodging industry.
Today, a recovery is still predicted to be at least nine months away. In November, hotel occupancy rates in the Sacramento area were just 53.8 percent, according to PFK Consulting in San Francisco. To help launch the Roseville property, Hyatt Hotels Corp., which is managing the hotel, has brought in a veteran Hyatt general manager. It also hired the sales director from Placer Valley Tourism, the marketing group for south Placer County.
The 20-employee hotel opens Tuesday. “It’s a distinctively different property for Roseville ... and it has a full-service feel to it,” said Dan Hayward, managing director of PKF Capital Hotel Realty in Sacramento. The Hyatt Place isn’t a full-service hotel because it doesn’t provide room service. But it does have a restaurant serving breakfast, lunch and dinner, and there is a bar and lounge. That alone sets it apart from almost all the hotels in the market.
“I think the location will be very good for them, and they have great visibility from (Highway
65),” Hayward said. Roseville has many brands of hotels, such as Intercontinental Hotels Group, which includes Holiday Inn; Marriott International Inc.; Choice Hotels International; and Hilton Hotels Corp. This is the first Hyatt in south Placer County. “This is not your cookie-cutter product in the market,” Hayward said.
The six-story hotel is 93,500 square feet, including meeting space and a pool. Completed nine months behind schedule, the Hyatt Place was stalled by the tough economy, said Mickey Bruce, spokeswoman with ABA Development. Construction fell behind schedule because it was difficult to put together financing, she said. Then, occupancy and room rates declined. “The hotel business is still tough,” Bruce said of the low occupancy rate. “We are looking for that upturn.”
For the first 11 months of 2009, the average daily room rate in Sacramento was $94.46, down 8.1 percent from $102.77 for the same period in 2008. Occupancy also was down sharply, from 66.7 percent for the first 11 months of 2008 to 59.3 percent through November 2009, according to survey numbers compiled by PKF Consulting. But the south Placer lodging market, which includes Roseville, Rocklin and Lincoln, improved last year compared to 2008, said Greg Van Dusen, chief executive officer of Placer Valley Tourism.
There were more rooms booked in the market, but more were added to the supply. The increase
in rooms booked wasn’t great enough to outpace the increase in supply. The Hyatt Place is one of several hotels that had been slated for the area. Next door to the Hyatt, a conference center and Embassy Suites were proposed by Kobra Properties. Kobra started and halted construction several times before putting the property into bankruptcy protection at the end of 2008. The land is vacant. Many of Kobra’s properties are being auctioned off. And another Hyatt property, the Hyatt Summerville Suites, had been proposed next to the Hyatt Place by a different developer. That project is not moving forward. “We’re all alone out here for a while,” Bruce said.
Hyatt Place checks in to slow Placer Hotel Market
Sacramento Business Journal by Mark Anderson Staff writer
A Hyatt Place hotel is opening in Roseville next week, smack-dab in the midst of one of the
weakest lodging markets in history. The good news for the upscale 151-room Hyatt is its location — a bustling section of Roseville adjacent to the Galleria at Roseville mall and The Fountains shopping center. The $25 million hotel broke ground in July 2008, during what was then the worst lodging market in years, said Scott Brown, chief executive of ABA Development in Larkspur, developer of the project.
At the time, economic forecasts predicted a nine- to 12-month recovery for the lodging industry.
Today, a recovery is still predicted to be at least nine months away. In November, hotel occupancy rates in the Sacramento area were just 53.8 percent, according to PFK Consulting in San Francisco. To help launch the Roseville property, Hyatt Hotels Corp., which is managing the hotel, has brought in a veteran Hyatt general manager. It also hired the sales director from Placer Valley Tourism, the marketing group for south Placer County.
The 20-employee hotel opens Tuesday. “It’s a distinctively different property for Roseville ... and it has a full-service feel to it,” said Dan Hayward, managing director of PKF Capital Hotel Realty in Sacramento. The Hyatt Place isn’t a full-service hotel because it doesn’t provide room service. But it does have a restaurant serving breakfast, lunch and dinner, and there is a bar and lounge. That alone sets it apart from almost all the hotels in the market.
“I think the location will be very good for them, and they have great visibility from (Highway
65),” Hayward said. Roseville has many brands of hotels, such as Intercontinental Hotels Group, which includes Holiday Inn; Marriott International Inc.; Choice Hotels International; and Hilton Hotels Corp. This is the first Hyatt in south Placer County. “This is not your cookie-cutter product in the market,” Hayward said.
The six-story hotel is 93,500 square feet, including meeting space and a pool. Completed nine months behind schedule, the Hyatt Place was stalled by the tough economy, said Mickey Bruce, spokeswoman with ABA Development. Construction fell behind schedule because it was difficult to put together financing, she said. Then, occupancy and room rates declined. “The hotel business is still tough,” Bruce said of the low occupancy rate. “We are looking for that upturn.”
For the first 11 months of 2009, the average daily room rate in Sacramento was $94.46, down 8.1 percent from $102.77 for the same period in 2008. Occupancy also was down sharply, from 66.7 percent for the first 11 months of 2008 to 59.3 percent through November 2009, according to survey numbers compiled by PKF Consulting. But the south Placer lodging market, which includes Roseville, Rocklin and Lincoln, improved last year compared to 2008, said Greg Van Dusen, chief executive officer of Placer Valley Tourism.
There were more rooms booked in the market, but more were added to the supply. The increase
in rooms booked wasn’t great enough to outpace the increase in supply. The Hyatt Place is one of several hotels that had been slated for the area. Next door to the Hyatt, a conference center and Embassy Suites were proposed by Kobra Properties. Kobra started and halted construction several times before putting the property into bankruptcy protection at the end of 2008. The land is vacant. Many of Kobra’s properties are being auctioned off. And another Hyatt property, the Hyatt Summerville Suites, had been proposed next to the Hyatt Place by a different developer. That project is not moving forward. “We’re all alone out here for a while,” Bruce said.
Saturday, January 30, 2010
When Will Profitability Return for Hotel Operators/Owners?
The question on many hotel owners minds is "when will profit growth return and when will it be sustained?
This hinges alot on the unemployment rate. The unemployment rate will not turn positive for the Sacramento Region for another 4 quarters - January 2011. Once we have past this marker in the sand, we will see profit starting to return in the hospitality sector in the Sacramento Valley region.
Stay tuned for more forecast material that was discussed at the Americas Lodging Investment Show.
If there are topics you would like to for me to address, please reply.
This hinges alot on the unemployment rate. The unemployment rate will not turn positive for the Sacramento Region for another 4 quarters - January 2011. Once we have past this marker in the sand, we will see profit starting to return in the hospitality sector in the Sacramento Valley region.
Stay tuned for more forecast material that was discussed at the Americas Lodging Investment Show.
If there are topics you would like to for me to address, please reply.
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