Cornell Center For Hospitality Research

Only hotels in the South Atlantic region experienced a positive price momentum during this period. The performance of hotels in non-gateway cities declined at a faster rate relative to those in gateway cities. Hotel financial operating performance has finally returned to positive profitability with operating profit exceeding both a hotel property’s operating costs as well as financial (borrowing) cost, based on economic value analysis (EVA).

The price of larger hotels has spiraled downward at a faster rate than that of smaller hotels and repeat sale hotels. The cost of hotel debt financing, as well as equity financing, has declined, with virtually no change in the relative risk premium for hotels. However, the spread between the 10-year Treasury and the 3-month Treasury has fallen even further into negative territory, which continues to raise concerns over its impact on market liquidity as well as its contribution to slower price growth in hotels (since this is a recession indicator). A reading of our tea leaves suggests prices are expected to decline for both large and small hotels.

Click here ( Adobe Acrobat PDF file) to download the complete article.

Logos, product and company names mentioned are the property of their respective owners.

You May Also Like

Fighting workplace burnout in the hospitality industry

Burnout is a health hazard in the workplace and hospitality is more…

U.S. Hotel F&B Performance Increased in 2018

U.S. hotel food-and-beverage revenue per occupied room (F&B RevPOR) increased 2.7% in…

Hospitality workwear

Positive Branding is an established workwear provider with a huge clothing range…

Bennett Hay celebrates a year a success with Guest First Awards 2019

Bennett Hay, the bespoke hospitality company has marked another successful year with…