The hotel industry has staged an impressive comeback from the depths of the recession, with California poised to see considerably more investment in real estate acquisitions and new development, a panel of experts agreed on Friday.
Not only are hotels consistently seeing their room revenues rising, but prices paid for a growing number of hotels, particularly coastal properties, have spiked to more than $1 million a room, and investors are looking to develop new properties.
That marks a big change from the recent past when there have been very few new hotels sprouting from the ground.
“We’re pretty much back to the peak prices we last saw in 2007,” said Alan Reay of Atlas Hospitality Group, one of several hotel experts speaking at a lodging industry forecast sponsored by R.A. Rauch & Associates.
“Dollar volume of acquisitions was up 35 percent last year, and the (median) price per room skyrocketed over 40 percent in San Diego last year.”
As a measure of the now rapidly recovering lodging industry, Reay pointed to the rising number of properties that are either being sold or refinanced at values of a million dollars or more a room.
Several years ago, the Hotel del Coronado set a record for the highest price per room paid for a San Diego County hotel, then $1 million, Reay noted.
In 2012, five hotels in the United States were sold or refinanced with a value over $1 million per room, and in 2013, that number jumped to more than 20. More recently, two hotels in Santa Monica — Shutters and Casa del Mar — were refinanced at values of more than $2 million a room, Reay said.
The environment is also ripe for new development, especially as more investors from China look to the U.S. to invest large pools of capital, the panelists said.
A Shanghai firm, for example, is preparing to break ground on the first phase of a $1 billion luxury hotel and housing project in downtown Los Angeles known as Metropolis.
“To say the Chinese are coming is a lot like saying the British are coming.They’re here,” said Los Angeles attorney Guy Maisnik, whose legal work focuses on hospitality transactions.
“If this conference were in L.A., a third of the audience would be Chinese. ... They haven’t targeted San Diego yet, but they want their capital out of China. They’re looking for schools for their children, a different lifestyle. Ultimately, they will come here.”
San Diego, like other metro areas, is starting to see more hotel development as financing becomes more available. The most recent opening was the 78-room Pier South in Imperial Beach. And the developer of a 400-room hotel on Lane Field is planning to begin construction next month.
It would be the largest new San Diego hotel since the opening in 2008 of the 1,190-room San Diego Bayfront Hilton.
One piece of good news for San Diego is that it is among five hotel markets in the U.S. that have already seen a 10 percent increase over last year in future bookings, said Sandra Shapira, sales director for TravelClick, a company that provides e-commerce products and services to the hotel industry. The others are Minneapolis, Denver, Atlanta, San Francisco and Tampa, she said.
utsandiego.com
Not only are hotels consistently seeing their room revenues rising, but prices paid for a growing number of hotels, particularly coastal properties, have spiked to more than $1 million a room, and investors are looking to develop new properties.
That marks a big change from the recent past when there have been very few new hotels sprouting from the ground.
“We’re pretty much back to the peak prices we last saw in 2007,” said Alan Reay of Atlas Hospitality Group, one of several hotel experts speaking at a lodging industry forecast sponsored by R.A. Rauch & Associates.
“Dollar volume of acquisitions was up 35 percent last year, and the (median) price per room skyrocketed over 40 percent in San Diego last year.”
As a measure of the now rapidly recovering lodging industry, Reay pointed to the rising number of properties that are either being sold or refinanced at values of a million dollars or more a room.
Several years ago, the Hotel del Coronado set a record for the highest price per room paid for a San Diego County hotel, then $1 million, Reay noted.
In 2012, five hotels in the United States were sold or refinanced with a value over $1 million per room, and in 2013, that number jumped to more than 20. More recently, two hotels in Santa Monica — Shutters and Casa del Mar — were refinanced at values of more than $2 million a room, Reay said.
The environment is also ripe for new development, especially as more investors from China look to the U.S. to invest large pools of capital, the panelists said.
A Shanghai firm, for example, is preparing to break ground on the first phase of a $1 billion luxury hotel and housing project in downtown Los Angeles known as Metropolis.
“To say the Chinese are coming is a lot like saying the British are coming.They’re here,” said Los Angeles attorney Guy Maisnik, whose legal work focuses on hospitality transactions.
“If this conference were in L.A., a third of the audience would be Chinese. ... They haven’t targeted San Diego yet, but they want their capital out of China. They’re looking for schools for their children, a different lifestyle. Ultimately, they will come here.”
San Diego, like other metro areas, is starting to see more hotel development as financing becomes more available. The most recent opening was the 78-room Pier South in Imperial Beach. And the developer of a 400-room hotel on Lane Field is planning to begin construction next month.
It would be the largest new San Diego hotel since the opening in 2008 of the 1,190-room San Diego Bayfront Hilton.
One piece of good news for San Diego is that it is among five hotel markets in the U.S. that have already seen a 10 percent increase over last year in future bookings, said Sandra Shapira, sales director for TravelClick, a company that provides e-commerce products and services to the hotel industry. The others are Minneapolis, Denver, Atlanta, San Francisco and Tampa, she said.
utsandiego.com
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