Hotel values are down 50% since 2007, but investments by Blackstone (BX) and Richard Branson may...


Hotel values are down 50% since 2007, but investments by Blackstone (BX) and Richard Branson may presage a flood of deals in the lodging industry. “I have never ... seen so much equity on the sidelines ready to pounce,” says an industry source. Half off is nice, but the early 90's recession brought even cheaper prices, such as the 1993 sale of the Hyatt Waikoloa for 12 cents on the dollar.

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Comments (11)
  • Ohrama
    , contributor
    Comments (568) | Send Message
     
    The present economic and financial condition, our technological status (or superiority) and the super real estate bubble we floated, the shrinking wealth etc. as compared to 1993 seem to imply that even that 12 cents on the dollar might be on the high side. On the other hand, the continuous propping by the Fed and the Govt. and other manipulations might keep the prices higher for some more time. If I can only predict when exactly (time wise) the later gives way (or fails utterly).........?
    5 Dec 2010, 05:13 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4291) | Send Message
     
    12c on the $. Would that be 1993 $s or 2010?
    5 Dec 2010, 05:27 PM Reply Like
  • Credible Clarity
    , contributor
    Comments (160) | Send Message
     
    Value and price are not always the same. Most of the 2007 prices of real estate and equity stocks, were not a good "value", except on the selling side. So, whether today's asking prices of 50% less than the once too richly priced really represent good values remains to be seen. As noted, 80% less isn't necessarily a good value depending on circumstances.
    But then again, with all the medication and manipulation in the markets currently, it is very difficult to assess real values forward.
    5 Dec 2010, 05:31 PM Reply Like
  • If U Say So
    , contributor
    Comments (348) | Send Message
     
    I'm confident there are still better deals to be had further down the road. Focus on those that haven't managed to refinance enough to weather a lengthier storm. Think of all those mega-casino hotels built in the last 5 years in Las Vegas. This will get ugly. I figure some of them will feel the maximum lactic acid build about 24 months from now.
    5 Dec 2010, 06:49 PM Reply Like
  • positivethoughts
    , contributor
    Comments (2064) | Send Message
     
    Hotel industry as I see it:

     

    Margins very low
    Asset value of properties not increasing as CRE market bad
    Carry tremendous debt burden against assets in tight lending market
    World economy not strong exept emerging markets
    Economic moat very limited as offerings easily copied by competitors, even smaller ones.
    Economies of scale not as great an advantage as in other industries.
    Labour is major expense for operators and it isn't going to get cheaper anytime soon.
    5 Dec 2010, 07:15 PM Reply Like
  • Econdoc
    , contributor
    Comments (2938) | Send Message
     
    I got one word for you.

     

    revpar
    5 Dec 2010, 11:29 PM Reply Like
  • Papaswamp
    , contributor
    Comments (2241) | Send Message
     
    Better hope all those potential vacationers get jobs and come off food stamps.
    5 Dec 2010, 09:37 PM Reply Like
  • Econdoc
    , contributor
    Comments (2938) | Send Message
     
    count on it.

     

    the time to get long is before that happens.
    5 Dec 2010, 11:18 PM Reply Like
  • Papaswamp
    , contributor
    Comments (2241) | Send Message
     
    I'm out of equities...quite happy with my gold and silver choice thank you.
    6 Dec 2010, 07:37 AM Reply Like
  • Econdoc
    , contributor
    Comments (2938) | Send Message
     
    you want to buy them

     

    long H and L
    5 Dec 2010, 11:16 PM Reply Like
  • Dan in mpls
    , contributor
    Comments (243) | Send Message
     
    All I reading mainstream is that the economy is going to be roaring back next year. Better jump on it fast to avoid the rush. Id say more like over 10 years.
    6 Dec 2010, 04:53 AM Reply Like
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