Things are looking up for the hotel industry. Hotel revenue per available room is up 7.8% for the week ending Jan. 8th year-over-year. This measure of the industry took a HUGE hit in 2008 and 2009 forcing many hotels into the red.
RevPAR is defined as: A performance metric in the hotel industry, which is calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate. It may also be calculated by dividing a hotel's total guestroom revenue by the room count and the number of days in the period being measured. (source investopedia.com)
Now this metric is applied across the entire industry and certain segments of the industry are doing better than others. Right now, I'm tuned in to a segment of the industry that is seeing some improvement but still lagging behind most of the industry. These properties are in need of private financing and/or acquisition to right their books. There are significant discounts available on the paper and real estate in this segment and at the right prices, these properties will produce a very nice IRR with low risk.
If you would like more information about this segment, please contact me Frank Fusco, Esq. at frank@globalhotellaw.com
A weekly update on hotels from HotelNewsNow.com: STR: US weekly results for week ending 8 Jan.
In year-over-year comparisons, occupancy increased 5.7 percent to 42.8 percent, average daily rate was up 2.0 percent to US$93.43, and revenue per available room finished the week up 7.8 percent to US$40.00.
The following graph shows the four week moving average of the occupancy rate as a percent of the median occupancy rate from 2000 through 2007.
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