The U.S. hotel industry could lead the recovery of commercial real estate, buoyed by its first annual increase in demand since 2007, according to Jones Lang LaSalle.
“In the hotel sector, we think that the worst of the decline in hotel fundamentals are being experience in 2009,” said Josh Gelormini, director of capital markets research for the Americas. Gelormini was one of three JLL executives who reported on the company’s “U.S. National Economy and Property Market Outlook” during a webinar yesterday.
“As rebounds in leisure travel as well as business travel begin to slowly take shape in early 2010 and comparison become more favorable, that’s where we’ll see that increase in demand.”
Demand is expected to increase by 1.1 percent in 2010, which eventually will lead to compression in average daily rates. Revenue-per-available-room declines will decelerate greatly in 2010, though it’s still forecast to be down from 2009 levels as a whole. By mid-2010, however, the metric is expected to flatten out and record positive growth in year-over-year comparisons, according to the report.
Jones Lang LaSalle’s hotel division is expecting a significant increase in U.S. hotel transaction activity next year compared to 2009, and 2011 will bring further increased activity on a more robust scale, said Thomas Fisher, managing director for Jones Lang LaSalle Hotels, in an e-mail.
