RevPAR is up, room rates are up, travelers are back, REITs have made the hotel ROI they wanted, and hotel valuations are nearly the same as they were in 2007, before the Great Recession hit. It sure feels like we’re in the middle of the game – which is a lot better than being at the bottom.
All these factors make this a good time for buying or selling hotels. At the same time, caution is key.
Some don’ts and do’s:
• Don’t jump into the market without proper preparation
• Be skeptical of “dirt-cheap” deals
• Scour suburban areas around the top 50 MSAs for your best shots. Focus on midmarket, limited-service properties, the sweet spots in the hotel industry
• Don’t overpay for a hotel unless your specific strategy is going to meet your return requirements.