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AMHB INDUSTRY NEWS UPDATE…..

FEBRUARY NEWS…..

Friday, February 15, 2019

TRUMP ORGANIZATION STOPS PLANS BUILT HOTEL!
The Trump Organization announced yesterday they are halting plans for at least two years to build as many as 30 new hotels under their newly formed Scion, and, American Idea brands, the New York Times wrote yesterday. EVP Eric Trump pointed to the ‘political climate as the reason’ for their decision. The first such hotel, a Scion, was planned for the Mississippi Delta. The Trump’s had planned to develop with brothers Dinesh and Suresh Chawla “as many as three American Idea hotels’.

POSITIVE 2019 YEAR TO YEAR TO DATE RESULTS
U.S. Hospitality/Lodging data from STR reports to date 2019 off to comfortable start. Hotel News Now reports in their February newsletter that our Industry shows positive results year over year to date.  Occupancy rose 0.2% to 59.9%; ADR increased 1.5% to $126.68; and RevPAR rose 1.7% to 75.84.

AMHB Network CEO Envisions Healthy 2019
Speaking with Mike Sprinkle, CEO, and a 48 year veteran of Hotel and Motel Brokerage, Mike states that their Firm does see signs some “deceleration of hotel growth”.  In that he stated will normally follow a disruption of Occupancy, ADR, and RevPAR.  Having lived through at least seven such ‘down turns’/ ‘upturns’, our Firm has already laid out some marketing and technology platforms that will handle Owners and Buyers wants and needs.

Sprinkle went on to say that as the Firm did in the 70’s – 90’s, they are setting up Offices Overseas within their International Division.  That combined with their growing base of 3rd Party Investors, they are getting set for “New Opportunities” that will benefit both their Sellers, and their Buyers.

NEWS TIDBITS…….

TIDBITS : Hospitality Owners and Executives of publicly traded companies and Investment Trusts concur that 2019 will see increases in dollars spent on renovation and group travel.

USA HOTEL TRANSACTIONS & PRICE PER ROOM UP…. 
Contrary to early Spring, 2018, reports, Hotel Transactions have enjoyed a pleasant surprise.  Number of Transactions rose 11.3% during first half compared to same time 2017.

Jan – June – 2017:  $9,084,012,000 Transaction Dollar Volume
Jan – June – 2018:  $10,112, 740,000 Transaction Dollar Volume
11.3% increase

2017 Price per Room was at $196,000.
2018 Price per Room was at $220,000
12.2% increase

Florida and New York were the busiest states for overall transactions at 24 and 20.
*as reported by STR Hotel Transaction Almanac

AMERICAN MOTEL HOTEL BROKERS NETWORK TRANSACTIONS “BEAT” PROJECTIONS …..
With the addition of New Member Offices in California, Louisiana, Texas, Georgia, Florida, Illinois total sales transactions increased to 24% over beginning of 2018 projected goals.  The Company’s Network and Headquarters increased jobs by over 25%.  “The last half of 2018, has started as strongly as the first half ended.  Our forecasts for total sales transactions were increased by the Board in late Spring”, commented CEO Mike Sprinkle.


BEST WESTERN INTERNATIONAL FILES TO BECOME “FOR PROFIT” 

BW International filed on August 10 with US Securities Exchange Commission that it will convert from a ‘not for profit’ business to become a ‘for profit’ business entity.  The Issue will be 55 million common shares, and Best Western has set beginning of December to start the Issue.

USA early August STR indicates Occupancy up 2% to 75%; ADR up 3% to $132; RevPar up 5 % to $99.
Canada reports Occupancy down by 1.3% to 80%; ADR up 1.6% to $139*; RevPar up .3 to $146 (American $111)
* Canadian Dollar

RED ROOF INN ANNOUNCES BRAND EXPANSION
Red Roof is adding two Extended Stay brands to its collection.  They are Home Towne Studios; and, Home Towne Suites. The Company intends to launch over 30 properties across more than 20 markets with expected total rooms over 4000.

Q2 STRONG QUARTER AT CHOICE HOTELS…… 
Choice Hotels reports RevPar increase of 2.7% across the board for Second calendar quarter this year.  This increase was stimulated by increases of 2.4%  rise in ADR, and a smaller increase of 0.2% in OCC.

BUILDING CONTINUIES IN USA !
STR reports that 190,260 rooms are under construction in United States through July, 2018.
This is up 0.8% year to year.  The top five Markets for new Hotel development are:
#1      New York
#2      Orlando
#3      Dallas
#4      Los Angeles/Long Beach
#5      Houston

UNITED KINGDOM LEADS EUROPEAN BUILDING !
HNN reports that the United Kingdom is Europe’s leading builder of new hotel rooms.  They are seeing a 5.8% increase year over year.
MIDDLE EAST AFRICA IS ‘TOPS’ FOR HOTEL DEVELOPMENT INCREASE !
Yes, the United Arab Emirates leads Mid East Africa with an amazing 32.4% increase year over year .

SBA 504 AUGUST 2018 INTGEREST RATE UPDATE….
25 Year Purchase Rate = 5.346%
20 Year Purchase Rate = 5.294%
20 Year Refinance Rate = 5.343%
10 Year Purchase Rate  = 5.289%

AMHB ARIZONA OFFICE REPORTS RECORD TOURIST VISITS…. 

The State of Arizona generated $22.7 Billion from tourist visits last year.
AMHB of Arizona Hotel Brokerage Firm went on to state, “Arizona welcomed American and Foreign visitors who had 43.,9 million overnight stays in 2017.  This staggering fact directly supported 187,000, jobs largely within the Hotel and Hospitality industry.  The Brokerage Firm went on to say that the number of Hotel Buyers received by their Phoenix office has more than DOUBLED THE LAST SIX MONTHS of 2018.

US Q2 Hotel Performance P/STR…….
United States Hotel occupancy rose 1.1% for Quarter two to 70.2%; ADR increased 2.9% to $131.02; and ‘all important’ RevPAR rose 4% to $91.94.

Europe Q2 Hotel Performance P/STR…. 
Europe’s Hotel occupancy increased 1.1% to 75.5%; ADR increased to 115.54 European…$135.37 American; and RevPAR increased 4.9% to 87.20 E….$102.17

SBA (Small Business Administration) July Effective Rates…..
20 Yr: 5.254 %….Note rate 3,957%
10 Yr: 5.289%….Note rate 3.308%
20 Yr. Refi:  5.303%…Note rate 3.597%
25 Yr. 5.316% …note rate 3.724%
Rates include fees to CDC, SBA, central service agent

US STATISTICS WEEK END JUNE……
Occupancy:  Up .2%…..across America
ADR:            Up  3.1%….across America $131.56
RevPar:         Up 5.2%…across America $99.57

CANADIAN HOTEL STATS WEEK END JUNE….
Occupancy:  Up .2%…..across Canada 74.1%
ADR:            Up .6%….across Canada  $ 175.46
RevPar:         Up  .7%….across Canada $130
($ = Canadian Dollar)

AMHB NETWORK JOINS THE FAVORABLE END OF JUNE STATS…..
As the Hospitality / Lodging Industry continues to show very favorable “Statistics”, American Motel Hotel Brokers Network ‘joins the upward spiral’!

AMHB announced today Transactions of Hotels/Motels/Resorts/ Assisted Living Hotel Conversions for first half of 2018 were up over 37 Per Cent.  Their Inventory of Properties For Sale now exceeds $600,000,000, from large hotels/resorts at over $100M asking price, to, smaller “starter’, and, ‘upside potential’ properties at $1,000,000, and up.

HOTELIERS BE ALERT ……
HNN reports that as many as 28.5 million hotel stays, representing a cost of $5.2 billion, are direct result of fraudulent phone and online scams since 2017.  This is from AH&LA new research study……

US TAX REFORM CAN BENEFIT HOTEL INVESTORS…… 
Sean McCracken, News Editor, writes that recently adopted tax rules offer some big changes for real estate investors.  This comes according to a panel of experts.  These changes are largely positive…….

US ECONOMY CONTINUES IT’S GROWTH……
Old news stated US Economy grew 2.3% during 2018, 1st Quarter….however though comparative statistics for Q2 are not yet out, most within the Hospitality/Lodging business experienced continuing Q2 growth also……..

AMHB RESEARCH REACTS FAVORABILY WHILE SOME ‘WONDERING’……
The American Motel Hotel Brokers research team finds continued strong demand for hotel rooms by guests….BUT….also, subject not discussed often is Selling and Buying of Hotels.  For 48 continuous years that has been AMHB’s business.  This past weekend, early research reports indicate a growing demand for purchasing Hotels/Motels/Resorts.  From AMHB Member offices that cover over 50 US markets, every office reported ‘up stats’.  Pat Green, 35 year Hospitality/Lodging Broker within the AMHB Network is projecting their Offices largest Sales Year this Decade……

INDUSTRY TIDBITS…..
American Motel Hotel Brokers Member Network reports very good success in their recent ‘drive’ to increase Inventory of Hotels for sale.  This increased inventory now provides over $500,000,000 of hotels, et al, ready to be purchased.  Many markets in the United States need more Hotels for sale to meet Buyer demand.  In AMHB Network’s Corporation home state, Arizona, Paul Parashar, Regional Director for a portion of Arizona emphasized recently that the Phoenix, and many surrounding markets, have an abundance of qualified buyers but fewer hotels available for sale at this time. The Arizona Member Agency, AMHB of Arizona, is actively contacting Owners interested in selling.

USA NEW CONSTRUCTION DROPS……
STR reports a 2.2% decline in new Hotel construction compared to April, 2017.  Construction of new hotel rooms in USA has declined in 6 of last 7 months.

FRANCE…AT LAST…SEE GROWTH…..
European sources report finally Paris is seeing new hotel supply as the return of travelers grows.

USA HOTEL REVENUES ‘HIT’ $208 BILLION….
from STR comes word that USA Hotel revenues exceeded $208 Billion in 2017.  That is an increase of $10 Billion !

CENTRAL/SOUTH AMERICA ‘SLOWS’….ASIA//PACIFIC ‘GROWS’…..
From the HNN Newswire comes word that hotel construction in Central/South America decreased 17.9% in April compared to April 2017.  Simultaneously, hotel growth increased in Asia and the Pacific by 27.1% during same period.

ARIZONA ‘BRIGHT SPOT’ FOR JOB CREATION….
Arizona State University in a new forecast writes that the Arizona economy will continue to expand ion 2018, with no recession on the radar !  Jobs will gain, as will population.  In 2017, Arizona placed among the top 10 states for job creation, domestic immigration, population growth and other key measures. ASU ended by forecasting further momentum likely this year, and perhaps beyond.

RED ROOF HAS ANNOUNCED their “Red Collection”,
John Garry, Franchise Development Director advises.
It is featured as an ‘Upscale Economy’ segment soft brand that is focused as unique hotels that are hper-local and inspired by a city’s vibe and culture.