Good News, U.S. Hotel Profit Recovery
According to the new PKF Trends survey, the U.S. lodging industry produced a 12.7% profit growth in 2011. 80.5% of participating hotels enjoyed an increase in total revenue while 72.3% achieved growth in profits.
The recently released 2012 edition of Trends presents data from a sample of nearly 7000 financial statements of United States hotels. For the Trends report, hotel profits are defined as net operating income (NOI) before deductions for capital reserves, rent, interest, income taxes, depreciation and amortization.
On May 9, 2012, the Lodging Industry Investment Council (LIIC) issued the results of its survey in the LIIC Top Ten, a highly regarded profile of investment sentiment and attitudes for the lodging industry for the forthcoming 12 months. Altogether, the members of the LIIC represent acquisition and disposition control of billions of dollars in lodging real estate. The hospitality industry's most influential investors, lenders, corporate real estate executives, REITs, public hotel companies, brokers, and significant lodging equity sources are represented on the council. LIIC serves as the leading industry think tank servicing the hospitality business. Here are some of the survey findings:
- Hotel property values will continue to increase
- Quality of hotel product or market will continue to improve
- In 2013, lodging transaction volume to increase
- Debt financing is returning
- Hotel development beginning
In the light of the strong increase in 2011 profit growth, a knowledgeable hotel man could conclude that the good news is a reflection of the success of the Obama administration's economic policies even in the face of a recalcitrant and unrealistic political opposition.