Will Hotel values go down?

Will the hotel prices will go down by end of this year?
In Buying Property - Asked by Alpesh P. - May 10, 2009
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Answer(s)

Paul S.
Broker/Agent
Glendora, CA

That is a very general question. The answer depends on a lot of things. Hotel values have in fact already gone down in many areas. As the economy tightens the need for hotel space also dimishses and ultimately the price. Real estate is constantly in a cycle and most areas of real estate are in the down side of the bell graph. To be more specific one would need more information. If you would like a more detailed answer call or e-mail me with details at: paulsylvester@remax.net or 626 485-5163.
Paul Sylvester, CCIM

May 11, 2009
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Mike J.
Developer
Winston Salem, NC

... but now Obama's pumping all this bailout money into the economy, which can only cause inflation. So that will take the edge off revenue loss a bit - fewer guests, but not that many fewer, and they'll be paying more, inflated dollars until things come up a bit.
Also, hopefully, the trickle down effect from the mortgage crisis is going to take out a lot of these older cheaper properties as their owners see the wisdom of converting them to SRO's, renting rooms to locals by the week...

May 11, 2009
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Mike J.
Developer
Winston Salem, NC

...so, no, much of the decline will be the result of tight credit available to the buyers. Decline in value based on revenue loss won't be that significant. If anything, you'll be able to get a pretty good one for a lower room revenue multiplier for awhile - 3x room revenue, as low as 2x for a fixer-upper (like paying below $800 or so for a car car, you know if you pay below 2.5x, you're buying a few problems, just as if you find a $500 car...) If you pay much more than 3x, you want to see pristine property condition, maybe very new construction, and high barriers to entry in the market. This isn't so much a market decline as a correction. Hotels have been a bit overvalued for a few years now and this ought to set things right.

May 11, 2009
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Paul S.
Broker/Agent
Glendora, CA

Alpesh
If you send me an e-mail I will send you research of actual numbers which do not reflect anything but down, with the exception of a couple of markets. There is a reason I get daily "deals" on rooms in Las Vegas, vacancy. Down can be good for those who can take advantage of it and have a plan.

May 11, 2009
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Sam T.
Broker/Agent
Addison, TX

Hotel Market in Dallas Fort Worth and Texas has been stable as compared to other markets around the country. I have seen business declining as much as 40% to 50% in other markets where as metropolitan areas in Texas have only been effect a maximum of 25%. There may be a few properties with special circumstances and competetion which may have gone down more than 25%, but based on a latest hospitality report, 15% to 25% was the maximum average.

May 14, 2009
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Tai L.
Broker/Agent
San Diego, CA

check out this website http://www.hotelnewsresource.com/HNR-region-region-North.html

May 22, 2009
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