The Hotel Valuation Index (HVI) tracks hotel values in 66 major markets and the United States as a whole.
Created in 1987 by HVS, the HVI is derived from an income capitalization approach, utilizing market area data provided by Smith Travel Research (STR) and historical operational and capitalization rate information from HVS's extensive global experience in hotel feasibility studies and valuations. From this information, it is possible to determine historical hotel values per room, as well as an indication of hotel value growth into the future.
HVI HIGHLIGHTS
• The United States HVI shows that per-room hotel values (expressed in dollars) increased, on average, by approximately 22% across the United States in 2006, compared with gains of 26% in 2005 and 28% in 2004, and decreases of 1% in 2003, 1% in 2002, and 24% in 2001. On average, perroom values in the United States grew by roundly $18,000 in 2006. As a result of the high double-digit growth in the last three years, the average value per room in the United States was at its peak in 2006.
• Sixty-two of the 66 markets reviewed experienced increases in per-room value in 2006, attributable to an upswing in both corporate and leisure travel, and higher investment activity nationwide. Notably, per-room values in both Rochester NY and Austin TX increased by 53% in 2006. A look into the history of the number of markets where hotel values have declined provides further insight into the positive results in per-room value recorded in 2006.
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