Friday, June 14, 2013

Marcus & Millichap Sees Economic Tailwinds Lifting Hotel Sector into Summer




WALNUT CREEK, CA -- The thriving energy and auto manufacturing sectors, and new vigor in housing, are boosting prospects for economic growth that will support higher occupancy and room revenue in the nation’s hotels, according to Marcus & Millichap’s second-quarter industry report.

O'Hare International Airport, Chicago, IL
Government spending cuts, however, will weigh more greatly on economic growth as 2013 progresses, though the effects of reduced spending and travel by government personnel and private-sector contractors is not certain.

Recent quarterly earnings calls by major hotel owners and operators revealed that recent declines in government-related room demand have been offset by additional growth in room nights from other demand segments. As room nights rise to record levels, supply growth remains restrained.

The planning pipeline has grown over the past year, and the number of rooms under construction rose more than 18 percent during that time.

Those impending deliveries, however, will expand national room stock a manageable 1.5 percent this year and beyond.

Construction lenders still view hotel construction cautiously, thereby clouding the status of planned projects.

Overall, there is an appetite for projects in locations where a hotel can capture unfilled room demand, and an aversion to new hotels that would merely redistribute existing demand.

For a complete copy of the company’s news release, please contact:

Ben Johnson
 Marketing Director
 Marcus & Millichap
2999 Oak Road
Suite 210
Walnut Creek, CA 94597
 (925) 953-1700 ext. 1736
(925) 953-1710 fax
(925) 270-9079 cell


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