Posted in Real Estate Investing

Top 5 U. S. Markets for Hotel Investments in 2014

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If you’re considering the purchase of a hotel investment, these 5 cities show positive trends in retail growth, which indicates more discretionary income, and are among the top 15 markets for higher occupancy rates YTD.

1. Los Angeles
2. Houston
3. New York
4. Seattle
5. Orlando

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While Millennials are showing traction towards indie hotels (for a unique experience) the demand is higher for branded hotels. Demand is above supply with the highest growth shown in the upper upscale segment:

Midscale: 48.8%
Upper Midscale: 43%
Upscale: 46%
Upper Upscale: 51%

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The long view: hotels have shown 10+ percent NOI growth for the past 5 years in a row and an average 20% ADR growth since 2010. The arbitrage between Cap rates & the 10-Year Treasury is about 500 bps, and is expected to continue into mid-2018, making hotels an attractive investment!

If you are interested in a feasibility study of a specific market segment, please contact me for a proposal.

Sources: Marcus & Millichap Research Services, Smith Travel Research, LVCVA

Image Source: Freeimages.com
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