Third Quarter 2016: Hotels Exhibit Positive Momentum
Liu, Crocker H.; Nowak, Adam D.; White, Robert M. Jr.
Our Standardized Unexpected Price (SUP) metric showed an uptick in the price of large hotels during the third quarter of 2016, with a continued decline in the price of small hotels. Although debt and equity financing for hotels were still relatively inexpensive during this quarter, we remain concerned that the increasing relative riskiness of hotels compared to other commercial real estate suggests that lenders will eventually start to tighten hotel lending standards if this trend continues. Our early warning indicators continue to suggest an eventual downward trend in large hotel prices. This is report number 20 of the index series.
Cornell; commercial real estate; hotel valuation models; HOTVAL; economic value added (EVA); hotel lending; early warning indicators
Supplemental File: Hotel Valuation Model (HOTVAL). We provide this user friendly hotel valuation model in an excel spreadsheet entitled HOTVAL Toolkit as a complement to this report.
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