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Recently, at the Americas Lodging Investment Summit, many people have pointed out that the supply of the hotel industry is greater than demand.
"2017 will be a year of supply that exceeds demand," said Mark Woodworth, senior managing director of CB Richard Ellis Research.
CB Richard Ellis predicted a declining trend
According to CB Richard Ellis, supply in 2017 will grow by 1.8%, demand growth of 1.5%. In the past few years, the hotel industry has not been able to solve the supply problem, but since 2015, supply growth is on the rise. According to CB Richard Ellis data show that the supply in 2016 increased by 1.6%, still below the demand growth of 1.7%.
In the case of slowing employment growth and slowing ADR growth, CB Richard Ellis points out that supply growth has a negative impact on RevPAR. RevPAR is expected to grow by 3% in 2017, down 5.2% from 2014.
Investment forecast for 2017
Suzanne Mellen, Senior Managing Director, HVS, explains interest rate changes
In terms of investment, Suzanne Mellen, senior managing director of HVS, said cap rates have risen and will slow to grow in 2017, partly due to higher interest rates and slower growth in RevPAR. Mellen expressed disappointment with the rise in supply growth and said the new supply was widening the buying / selling gap, which in turn affected the seller's expectations.
However, the investment in the hotel industry will remain strong, overseas groups should cross-border investment in the United States. "The investment in the hotel industry is still active, but it may be reduced, not as hot as in 2016." Mellen said.
Some noteworthy deals include: In October 2016, China Life led the consortium to invest Starter $ 2 billion in hotel assets and Ampang acquired the US hotel for $ 6.5 billion - in addition to the Blackstone Group's Coronado hotel in San Diego.
Mellen pointed out that the REITs will rebound in 2016, they have regained 80% of their value, is expected in 2017 investors will sell assets.
When asked about the best investment destination in the United States, Jan Freitag, senior vice president of the industry, Jan Freitag, considered California, and Mellen said that investment in coastal cities such as San Francisco was still very expensive and that it was more difficult to enter these markets.
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