Hotel Bubble Wrapping

by Jack Corgel, Ph.D., CBRE Consultant | Mar 15, 2017

Read The Article

Key Takeaways

At a recent gathering I was involved in a group conversation with hotel property investors who agreed that they have been “choking on the numbers” in certain U.S. hotel markets. Stated differently, their spreadsheet models explode once either acquisition prices or development costs are entered to evaluate recent hotel opportunities, especially in red-hot markets. They asked “Should we pay such high prices now, given that the boom may turn into a bust?”. As a college professor, I offered the standard response: “It depends, what do you think?” As a hotel market forecaster, I promised to think and write about hotel property market bubbles with regard to their questions, and likely those of others, about current pricing in local markets.