While this is a slight dip in the pipeline year-over-year (YOY), its not unexpected given the lockdown and travel restrictions over the past year. Further, the pipeline shows no signs of great decline compared to what occurred during the 08 and 09 recession.
PACE financing guidelines are finally available for New York City, and while the program has not officially launched yet, hotel owners and developers in the area should start planning how to use these loans to retrofit their properties. My Partner David Sudeck discusses the program requirements.
Demand for 'Convertible' Properties has Skyrocketed over the Past Year
Europe is the only world region showing increased hotel construction activity in comparison with the end of Q1 last year, according to March pipeline data from STR.
Total European hotel transaction volume fell by 69% in the year of the pandemic following a record high the previous year when 27.1bn-worth of hotel deals were struck.
HVS discusses the main hotel transactions that took place in 2020 and looks at the trends in single-asset and portfolio transactions over the years.
The U.S. led the world in new hotel and room openings during Q1 2021, according to global pipeline data from STRs AM:PM platform. At the same time, the countrys construction activity continues to decline in comparison with pre-pandemic levels.
Saudi Arabia shows 73,057 rooms across the three phases of the hotel pipeline, and the countrys projected 67.1% increase in room supply over the next three years is the highest among the worlds 50 most populated countries, according to STRs AM:PM platform.
Sharp declines in revenue caused by the pandemic coupled with a more cautious approach to lending has prompted hotel valuations to fall over the past 12 months, although not as steeply as some had initially anticipated. This is the key finding of the annual European Hotel Valuation Index (HVI) compiled by global hotel consultancy HVS, which reports that in the year of the COVID-19 outbreak hotel values saw average declines of between 5% and 15% compared with the previous year.
Following a decade long run of largely strong hotel market fundamentals, investment activity fell to the lowest levels since the 2009 financial crisis in 2020 as the weight of the pandemic took hold. While the year was one none of us will soon forget, national and global immunization efforts put a rebound in lodging demand on the horizon and mark the early stages of the industrys recovery.