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Articles by Jack Corgel
HOTEL CURRENTS™: Hotel Financial Performance in Central and Non-Central City Submarkets, 2018 and 2024
During the pandemic, residential and commercial property prices in the central business districts (CBDs) of large metropolitan areas (MSAs) declined while prices generally increased in suburban areas. Many businesses located in CBDs that were dependent on residents, commuters, and tourists either ceased operations or relocated to the suburbs, often within the same MSA.
AI's Impact on Hotels
Hotels Written by Christine Bang, Jack Corgel and Rachel Rothman, CFA, ISHC — Contributor Artificial Intelligence (AI) and technology enhancements for hotels promise enhanced customer service, higher margins and expanded research and booking, with improved experiences for guests.
AI's Impact on Hotels : 4Hoteliers
Of equal importance is the likelihood that AI and broader technology improvements will materially shift the relationship between hotel brands, third-party management companies and hotel owners, as well as the relationship between the online travel agents (OTAs), metasearch platforms and the brands, owners and managers.
AI’s Impact on Hotels
By Rachael Rothman, Jack Corgel, and Christine Bang Artificial Intelligence (AI) and technology enhancements for hotels promise enhanced customer service, higher margins and expanded research and booking, with improved experiences for guests.
AI's Impact on Hotels
Artificial Intelligence (AI) and technology enhancements for hotels promise enhanced customer service, higher margins and expanded research and booking, with improved experiences for guests.
If Hotels are a Good Long-Term Investment, Why, and Where?
Key Takeaways A hotel held for seven years or more that generates excess returns relative to the NCREIF hotel index makes a good long-term investment. The assertion that long-term investment in hotels catering to leisure travelers will offer excess returns is supported by continuation of substitution and income effects in the labor market.
Hotel Currents: Economics and Hotel Financial Performance
The Discretionary Income Squeeze on Leisure Travelers Prepared for CBRE Hotels Research by Jack Corgel, Ph.D., Cordial Hotel Property Research Key Takeaways Over the last 18 months, domestic leisure travel has been well above historical trends as guests were not afraid to travel and had accumulated considerable savings during the pandemic. Economic conditions have changed.
Baird/STR Hotel Stock Index dipped 2.7% in August
STR 5 min read14 September 2022 HENDERSONVILLE, Tennessee, and MILWAUKEE - The Baird/STR Hotel Stock Index dipped 2.7% in August to a level of 5,021. Year to date through the first eight months of 2022, the stock index decreased 12.6%. “Hotel stocks took a breather in August after July’s sharp rebound.
Asia Pacific Hospitality Newsletter - Week Ending 02 September 2022
HVS 3 min read 7 September 2022 Thakral Corporation has sold Hotel WBF Namba Motomachi Singapore-based Thakral Corporation Ltd (“Thakral”) has divested Hotel WBF Namba Motomachi in Osaka, Japan at an undisclosed sum. Located minutes away from JR Namba Station and Namba Metro Station, the 111-key property features one breakfast restaurant and a club lounge for CLUB WBF members. The funds raised from the divestment will help to increase the company’s cash flows for reinvesting in other properties.
Europe Hotel Transactions Bulletin - Week Ending 02 September 2022
HVS 6 min read 7 September 2022 Saudi Arabia’s PIF and Cain invest $900 million into Aman Group Saudi Arabia’s Public Investment Fund (PIF) and London-based real estate investment firm Cain International have jointly invested $900 million (€872 million) into ultra-luxury hotel group Aman to support the group’s “global expansion of ultra-luxury hotels and branded residences, enhance existing properties and support the acquisition and development of new locations.” The transaction values Aman...
Part 2 | Long-run (1946-2020) Effects of Inflation on Hotel Operating Performance
If history is a guide, then investors should expect hotel incomes to keep pace with inflation during this current period of high and seemingly persistent inflation Key Takeaways From 1946 to 1982, when inflation was high, hotel profits and average daily rate (ADR) were both positively related to inflation and statistically significant. From 1982 to 2020, when inflation was low, the relationship between inflation and ADR remained strong, however hotel profits did not keep pace with inflation.
CBRE Hotels Lists Once-in-a-generation Byron Bay Landholding Listed for Sale
A prized 39.75 hectare Belongil Beach site offering 1.1 kilometres of pristine beach frontage has been listed for sale in a campaign tipped to generate international buyer interest. A prized 39.75 hectare Belongil Beach site offering 1.1 kilometres of pristine beach frontage has been listed for sale in a campaign tipped to generate international buyer interest. KTQ Group has appointed Pacifico Property’s Christian Sergiacomi and CBRE Hotels’ Wayne Bunz to market the North Beach Byron site.
Revisiting the Psychology of Pricing in Today’s Inflationary Environment
Daniel Skodol, VP of Revenue Management and Distribution at Inspirato, HSMAI Revenue Optimization Advisory Board Member The HSMAI Revenue Advisory Board recently met to discuss the psychology of pricing in today’s environment. Read on for a snapshot of key concepts in behavioral economics and how it affects pricing strategies. Key Concepts of Behavior Economics Guests react to how pricing is presented and how transactions are framed; it is all about context.
HVS Monday Musings: Income Capitalization Approach – The Gold Standard for Valuing Hotels | By Anand Rai
According to a recent GlobalData report, 573 deals (including mergers & acquisitions, private equity, and venture financing) were announced in the global travel and tourism (T&T) industry in the first half of 2022, reflecting a 3.1% increase over the same period last year. However, before these deals are concluded, the asset needs to be valued. So, how do we determine a hotel's market value and what exactly is valued under the category of hotels?
CBRE Forecasts 14.1% Increase in U.S. Construction Costs by End of This Year Before Costs Recede to Historical Levels in 2023 and 2024
Construction Costs Expected to Post Largest Increase in Years Due to Pressures From Both Supply and Demand Sides CBRE forecasts a 14.1 percent year-over-year increase in U.S. construction costs by the end of this year due to a litany of pressures including labor shortages, inflation, supply chain disruptions, ongoing pandemic reverberations and the war in Ukraine. The increase likely will be the largest in several years, though relief might be on the horizon, according to a CBRE report.
Baird/STR Hotel Stock Index jumped 14.3% in July
STR 5 min read18 August 2022 HENDERSONVILLE, Tennessee, and MILWAUKEE - The Baird/STR Hotel Stock Index jumped 14.3% in July to a level of 5,158. Year to date through the first seven months of 2022, the stock index decreased 10.4%. “Hotel stocks rebounded sharply and outperformed their respective benchmarks in July; relative outperformance has continued in August,” said Michael Bellisario, senior hotel research analyst and director at Baird.
Business Travelers Set to See Air Fares Rise by 8.4%, Hotel Rates by 8.2%, and Car Rental Charges by 6.8% in 2023
5 minute read Global Business Travel Association (GBTA) August, 11 2022 This is on top of a predicted full year 2022 increase in air fares of 48.5%, hotel rates of 18.5%, and car rental charges of 7.3% Global travel prices are predicted to continue to increase in the remaining months of 2022 and throughout 2023, according to the 2023 Global Business Travel Forecast, published today by CWT, the B2B4E travel management platform, and the Global Business Travel Association (GBTA), the voice of...
Part 2 - Long-Run (1946-2020) Effects of Inflation on Hotel Operating Performance - By Jack Corgel
If history is a guide, then investors should expect hotel incomes to keep pace with inflation during this current period of high and seemingly persistent inflation Part 2 Key Takeaways From 1946 to 1982, when inflation was high, hotel profits and average daily rate (ADR) were both positively related to inflation and statistically significant.
Asia Pacific Hospitality Newsletter - Week Ending 05 August 2022
HVS 4 min read 9 August 2022 Development Consortium Led by Alibaba and Perennial Holdings are to Redevelop the AXA Tower in Singapore China-based Alibaba Group Holding Ltd (“BABA”) will have 50% stake, Singapore-based Perennial Holding Ltd (“PH”) & Singapore-based Wilmar International (“WI”) with 29% stake, and remaining 29% is joint venture of Chip Eng Seng Corp, SingHaiyi Group and Haiyi Holdings controlled by Mr Gordan Tang and wife Celine has approval from the Urban Redevelopment...
Europe Hotel Transactions Bulletin - Week Ending 08 August 2022
HVS 6 min read 9 August 2022 COIMA sells Hotel Excelsior in Venice to London & Regional The iconic 197-room Hotel Excelsior on the Venice Lido in Italy has been sold by Italian real estate investor COIMA to owner-operator London & Regional Hotels (L+R) on behalf of the Lido di Venezia II Fund ("LDV II"). L+R is the LDV II Fund’s main shareholder and the existing operator of the Hotel Excelsior.
Long-Run (1946-2020) Effects of Inflation on Hotel Operating Performance
The inflation effect on hotel revenues and expenses was statistically significant. Read on to see if revenues or expenses were more closely tied to inflation. Part 1 Key Takeaways from 1946 - 2020 On average: The effects of inflation are only fully felt one year later. The inflation effect on hotel revenues and expenses was statistically significant. Read on to see if revenues or expenses were more closely tied to inflation.
CBRE Hotels Research U.S. Hotels State of the Union July 2022 Edition - By Rachael Rothman
2 minute read CBRE August, 1 2022 A Pictorial Update on Our Latest Thoughts and the Facts and Figures Influencing Our Industry The CBRE Hotels Research State of the Union showcases a pictorial review of current hotel trends, leading and coincident indicators of hotel demand, and an update on cost pressures and margin flow-through. The report showcases current demand trends, as well as fundamentals by segment, location type and chain scale.
Quantifying The Franchise Relationship During COVID-19 - By Robert Mandelbaum
4 minute read CBRE July, 25 2022 The relationship between the hotel brands and their franchisees was favorable and constructive in 2020. Both recognized that the impact of COVID was largely out of their control, and the best chances for both entities to survive relied on cooperation.
Hoteliers Urged To Listen, Learn from Whistleblowers - CoStar
Excerpt from CoStar UK Law Set To Change, Based Around Vulnerability As hotels in the U.K. continue to recover from the pandemic, managers must be careful to avoid shortcuts, but ready to hear the concerns of employees who speak out. As hotel businesses pull out every stop to aid recovery following the worst ravages of the COVID-19 pandemic, hoteliers are being warned to make sure practices conform to law and staff who have concerns are not vilified.
Long-Run (1946-2020) Effects of Inflation on Hotel Operating Performance - By Jack Corgel
12 minute read CBRE July, 18 2022 The inflation effect on hotel revenues and expenses was statistically significant. Read on to see if revenues or expenses were more closely tied to inflation. Part 1 Key Takeaways from 1946 - 2020 On average: The effects of inflation are only fully felt one year later. The inflation effect on hotel revenues and expenses was statistically significant. Read on to see if revenues or expenses were more closely tied to inflation.
Quieting the Noise in Economic Impact Estimates
An assessment of the accuracy of traditional approaches to valuing the economic contribution of convention, sports, and entertainment venues reveals significant limitations of economic impact models that tend to produce noisy and sometimes biased estimates. Improved methodologies and the effective use of available data sources that address some of these limitations can provide more reliable estimates.
CBRE Hotels Research U.S. Hotels State of the Union Independence Day 2022 Edition - By Rachael Rothman
A Pictorial Update on Our Latest Thoughts and the Facts and Figures Influencing Our Industry The CBRE Hotels Research State of the Union showcases a pictorial review of current hotel trends, leading and coincident indicators of hotel demand, and an update on cost pressures and margin flow-through. The report showcases current demand trends, as well as fundamentals by segment, location type and chain scale.
U.S. Hotel Information and Telecommunications Costs - By Robert Mandelbaum and Adam Barry
Just as technology has become more ubiquitous throughout our lives, it is now impacting guest service and hotel operations throughout all departments in a hotel. To provide more exposure to the growing costs associated with hotel information and technology systems, the 11th edition of the Uniform System of Account for the Lodging Industry added a discrete undistributed department to capture these expenses.
NYU Conference Takeaways: Despite Some Challenges, The Hospitality Sector Is Still Looking Good
Contributions by Michael Farbman, Chelsey Leffet, Caroline Dioso, Cole Masler, Stacey Nadolny, Daniel MacDonnell, Patricia Shih, Robert Fitzpatrick, & Emil Iskandar. Recession Forecasting Mixed The tale of the looming recession was mixed, with some forecasting a shallow, short-lived recession, and others expecting a more significant impact. The overall sentiment remains a positive one, and that cash flow growth should continue.
Serviced apartments lodged with travellers, says Cheval
Serviced apartments have found a permanent home with travellers, according to the results of Cheval Collection’s latest travel survey, with guests also looking for a great reputation and flexible booking. The study, analysing the responses of more than 2,200 travellers, found that 68% of respondents were likely or very likely to book a serviced apartment, when staying in either London or Edinburgh.
Cornell View for 2022: Insights and Expectations for the U.S. Hotel Industry
As the new year begins, the hotel industry wonders—what trends face the market going forward? This is precisely the question that finance professor Steve Carvell of the Cornell Nolan School of Hotel Administration and four experts came together to answer in a keynote webinar titled The View for 2022: Insights and Expectations for the U.S. Hotel Industry, produced by the Center for Real Estate and Finance.
How Do Changes in the 10-Year Treasury Rate Affect Hotel Capitalization Rates
Prepared for CBRE Hotels Research by Jack Corgel, Ph.D., Cordial Hotel Property Research On December 31, 2021, the constant maturity, 10-year U.S. Treasury note (the 10-year) stood at 1.52 percent. The 10-year now hovers around 3.0 percent and the prospects for higher rates appear good. During the data period for the analysis presented below, the 10-year ranged from 0.65 percent to 6.70 percent and last exceeded 5.0 percent in 2006.
How Do Changes in the 10-Year Treasury Rate Affect Hotel Capitalization Rates - By Jack Corgel
7 minute read CBRE May, 30 2022 On December 31, 2021, the constant maturity, 10-year U.S. Treasury note (the 10-year) stood at 1.52 percent. The 10-year now hovers around 3.0 percent and the prospects for higher rates appear good. During the data period for the analysis presented below, the 10-year ranged from 0.65 percent to 6.70 percent and last exceeded 5.0 percent in 2006.
PwC Reports Strength in Average Daily Rate Now Expected to Drive 2022 RevPAR Above 2019 Levels
2 minute read PwC May, 30 2022 PwC US Hospitality Directions May 2022 Despite an initial pull back in the recovery timeline caused by a surge in infections from a new omicron variant of the COVID-19 virus in December and January, continued improvement in top line metrics for US hotels is expected for the remainder of this year and next.
European Luxury Hotels Bounce Back from the Bottom
Luxury hotels across Europe have made an about-face and are back to producing profit at the almost same rate as 2019, according to data from HotStats. It’s an extraordinary turn of events for a sector that saw its gross operating profit per available room (GOPPAR) plummet during the dark days of the global pandemic, hitting a historical low of-€43.21 in May 2020.
Driving GOP During Inflationary Growth and Rising Labor Costs
High staff turnover has always been one of the biggest management challenges faced by owners and operators in the hospitality industry. But now, as the nation is experiencing record levels of inflationary growth, rising wages, and labor shortages, the hospitality industry is encountering extreme difficulty finding workers. So, how are hotel owners and operators managing rising labor costs and inflationary risk to drive their bottom line during these unprecedented times?
How Can Hotel Management Encourage Hotel Guests to Save Energy?
Among operating costs for hotels, one of the highest is utilities, with lighting and HVAC (heating, ventilation, and air conditioning) being the two biggest draws. To reduce operating costs, hotels often install energy-efficient lighting and ENERGY STARHVAC equipment in the room. However, energy usage is heavily dependent on guest practices. Will they turn off unnecessary lights and will they lower HVAC settings during their stay.
Eight things the industry learnt at IHIF 2022
Industry-leading event The International Hospitality Investment Forum (IHIF) returned to Berlin on 3-5 May, bringing together 2,400 forward-thinking investors, owners and developers and 267 speakers for unmissable opportunities. The conference’s core focus of people, planet and profit was covered in a raft of dynamic sessions, delivering 50 hours of exclusive content. Here are some of the key takeaways from the event. 1.
7 ‘Headaches’ an Inventory Management Partner Will Solve for Your Hospitality Business
When most people hear the term “inventory management,” they are likely to think of warehouses that ship products to consumers or manufacturing facilities that need to keep track of the different parts and equipment used in their work. But inventory management is just as applicable in the hospitality industry as well. This is especially true of hotels, restaurants, bars, casinos and other facilities that offer food and drinks to their patron.
Hospitality Financial Leadership - Why Your Hotel Needs a Daily "Pick-up" Report
You might be reading this and saying to yourself, “Well, for sure every hotel needs a daily pick-up report.” But I bet you would be surprised how many hotels do not use their pick-up report and or they do not use it properly. They are missing the financial opportunity that a good strategy around the daily pick-up represents. I have never and will never profess to being any kind of an expert at hotel revenue management. I strictly see myself as a novice.
A Recap of The 33rd Annual Hunter Hotel Investment Conference
Conference Key Takeaways Panelists at the 33rd Annual Hunter Conference spent a fair amount of time recounting how their companies navigated the pandemic. According to panelists, pandemic-driven changes that are likely to remain include eliminating daily housekeeping unless requested or at luxury properties, increasing the investment in and use of technology, and cross-training employees to perform multiple duties.
U.S. hotel profitability back on the rise after Omicron-induced dip
After falling to roughly US$20.00 in January, gross operating profit for U.S. hotels reached nearly US$59.00 – the highest level in the metric since October 2021, according to STR‘s February 2022 P&L data release. All of the key performance metrics increased from January, after concerns around Omicron pushed levels lower.
As Spring Break Volume Dipped, U.S. Hotel Occupancy Saw Decrease
As Spring Break travel volume dipped, the U.S. hotel industry saw weekly occupancy decrease 1.3 percentage points to 65.5% for the week of 20-26 March 2022. As compared with a year ago, average occupancy for the past two weeks combined was nearly eight percentage points higher, while the gap to 2019 was down to five percentage points. Average daily rate (ADR) also softened 1.5% week on week with the absolute level (US$149) the third highest in history.
The Energy Price Threats to Hotel Demand
During periods of elevated energy prices concerns about leisure and business travel stagnation become real. Travel requiring overnight accommodations is highly and predominantly discretionary. Leisure travel expenditures give way to necessities when energy prices spike.
Recovery of Business Travel – ‘Everybody Talks but Nobody Knows’ | By Jack Corgel – Hospitality Net
The media, when communicating about the prospects for airlines, aircraft manufactures, the hotels, and vendors that serve these sectors report on the return of business travel to pre-pandemic levels. But nobody knows! It’s reasonable to estimate an upcoming business travel recovery with an abstraction from what occurred after prior recessions, especially the post-financial crisis period.
Touring NCREIF's Property Total Return Index | By Jack Corgel – Hospitality Net
Hotel real estate investors need to measure both the absolute and relative financial performance of their properties. A 10% annual return may appear solid unless a collection of comparable investments earned 15%. Risk-adjusted returns measured against the appropriate index provide a way to assess managers’ abilities to generate excess returns. Measures of investment return come in many flavors. The multi-period IRR can be computed as a realized or unrealized percent.
Recent Urban Migrations And Hotel Markets | By Jack Corgel – Hospitality Net
Long-run future economic activity and hotel business opportunity will materialize in outlying areas of major MSAs, medium and small cities, and tax and cost-of-living friendly states. Many urban centers and high tax states run counter to the trend. Unless you were assigned to work at the International Space Station during the past 16 months you know that during this period numerous U.S. city households and businesses relocated.
US hotel interest coverage ratio still strong
US hotel interest coverage ratio still strong Although the costs of owning and running hotels are increasing, data shows most hotels are earning enough to pay for their debts even through a downturn. REPORT FROM THE U.S.—Revenue per available room growth for the U.S. lodging industry will be limited to less than 2.5% through 2020, according to CBRE’s latest “Hotel Horizons” forecast.
U.S. Hotel Interest Coverage | By Robert Mandelbaum and John B. Corgel, Ph.D – Hospitality Net
According to the March 2019 edition of CBRE's Hotel Horizons® forecast report, RevPAR growth for the U.S. lodging industry will be limited to under 2.5 percent through 2020. Further, CBRE is projecting a 0.6 percent decline in RevPAR for 2021 as CBRE expects the economy to slow down during the year. The combination of modest increases in revenue and rising operating expenses (especially labor) make hotel owners and operators nervous about their ability to enjoy profit growth the next few years.
Preventive maintenance tips | Irma's demand impact on Caribbean, US | International guests analysis
Newsletter From: HNN's Daily Update [mailto:newsletter@hotelnewsnow.com] Sent: Monday, September 25, 2017 8:11 AM To: harris_curtis@sbcglobal.net Subject: Preventive maintenance tips | Irma's demand impact on Caribbean, US | International guests analysis Click here to view in browser News Opinion Data Dashboard Advertise Maintenance should be proactive, unobtrusive to guests By Dana Miller, Associate Editor A hotel’s preventive-maintenance operations start with building a good team and...
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