Ed Brock is an award-winning journalist who has worked for various U.S. newspapers and magazines, including with American City & County magazine, a national publication based in Atlanta focused on city and county government issues. He is currently senior editor at Asian Hospitality magazine, the top U.S. publication for Asian American hoteliers. Originally from Mobile, Alabama, Ed began his career in journalism in the early 1990s as a reporter for a chain of weekly newspapers in Baldwin County, Alabama. After a stint teaching English in Japan, Ed returned to the U.S. and moved to the Atlanta area where he returned to journalism, coming to work at Asian Hospitality in 2016.
MOST HOTEL ASSET managers are expecting continuing declines in RevPAR for U.S. hotels until 2023, many between 50 to 75 percent, according to a survey from the Hospitality Asset Managers Association. The survey also found that most asset managers think lenders’ flexibility on loan deferments will end soon, and many believe owners will lose their properties as a result.
The fall outlook survey, released during HAMA’s 2020 Annual Fall Meeting, polled 103 participants about topics including the impact of COVID-19 on RevPAR, the effectiveness of major brands’ responses to the pandemic and current and future financial status of participant hotels.
“The pandemic has decimated the hospitality and other service-related industries, likely changing the way hotels operate for years to come. The hotel industry has a unique opportunity to ‘reinvent’ itself as it responds to the crisis, elevating cleaning protocols and embracing technology trends, which ideally will lead to a stronger industry once we find ‘the new normal,’” said Kim Gauthier, current president of HAMA and senior vice president of Hotel Asset Value Enhancement. “Our membership responses provide valuable insight into what asset managers are dealing with today, the lack of visibility into the future and what business changes are here to stay. These are very real concerns.’”
Survey findings include:
Nearly 60 percent of respondents predict a 50-75 percent decline in RevPAR versus budget for their entire portfolio.
While 32 percent of respondents believe non-CMBS debt providers have been flexible partners, 40 percent feel they have only been somewhat flexible, and 5 percent don’t believe they’ve been flexible at all.
For the 32 percent who feel their lending partners were being flexible, most of them, 41.67 percent, believe that flexibility will end in the fourth quarter.
A third of membership is concerned they will either have to hand back keys to their lender or be forced into a sale situation.
Nearly half, 43.69 percent, predict a 45-60 percent RevPAR decline in 2021 compared to 2019 for their full-service hotels.
More than a third, 35.92 percent, anticipate a 15-30 percent RevPAR decline in 2021 compared to 2019 for their select- and limited-service hotels.
Nearly half, 41.75 percent, believe industry RevPAR will return to 2019 levels in 2023. Some, 6.8 percent, feel those levels will return in 2022, while 3.88 percent think it will take as long as 2026 to reach those levels again.
HAMA’s forecast matches similar forecast for the near future of the industry, including business strategy company Magid and consulting firm Horwath HTL’s prediction in September that the pandemic will lead to a 29 percent decline in annual hotel occupancy over the next 12 months, costing $75 billion in room revenue. In August, STR and Tourism Economics revised their forecast for the industry to show U.S. hotel demand and room revenue remains unlikely until 2023 and 2024, respectively.
Sonesta launched Americas Best Value Studios, an extended-stay version of ABVI.
The model targets owners seeking limited front desk and housekeeping.
The brand meets demand for longer-term, value-focused stays.
SONESTA INTERNATIONAL HOTELS Corp. launched Americas Best Value Studios by Sonesta, an extended-stay version of its franchised brand, Americas Best Value Inn. The model targets owners seeking limited front desk and housekeeping, optional fitness center and lobby market along with standard brand requirements.
The brand aims to address the growing demand for longer-term, value-driven accommodations, Sonesta said in a statement.
"Americas Best Value Studios by Sonesta represents a strategic evolution of our trusted Americas Best Value Inn brand," Keith Pierce, Sonesta’s executive vice president and president of franchise development, said. "We are expanding our offerings to directly address the increasing demand within the extended-stay segment, providing a practical solution for travelers seeking longer-term lodging at value. This new brand type allows our local franchised owner-operators to tap into a growing market while maintaining the community-focused experience that Americas Best Value Inn is known for."
ABVI has a majority presence in secondary and tertiary markets, the statement said.
The extended-stay brand’s operational model features a front desk, bi-weekly housekeeping, on-site laundry and pet-friendly accommodations, Sonesta said. Guests can also earn or redeem points through the Sonesta Travel Pass loyalty program.
In August, Sonesta named Stayntouch its preferred property management system after a two-year review of its ability to support the company’s franchise model. The company operates more than 1,100 properties with more than 100,000 rooms across 13 brands on three continents.
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