Click here for the full article.

Near-Term Nirvana

"US hoteliers have never enjoyed such an extended period of favorable market conditions. We are in the midst of a six-year run during which lodging demand will outpace supply, hotel revenues will increase a cumulative 43.7 percent, and unit-level net operating income will rise 83.2 percent. This is truly unprecedented and will likely result in accelerated, and significantly greater, levels of capital investment into the domestic lodging industry," Woodworth concluded.

So the real issue about whether the nirvana is near or 'less near': realizing the rate growth projected is, of course, so dependent on your back yard. Let's say that you are poised to capitalize on this opportunity (check your STR report so see if you've been able to match, or exceed, your comp set performance on rate over the past 12 months for a good indicator of your readiness):

• Is your budgeted house profit (revenues - departmental expenses [variables]) projected to grow around 85% of the incremental revenues? (as relates to incremental room revenues)
• If there's room growth included in your budget, your HP should grow between 75%-85% of this incremental room revenue.


Now that would be Nirvana! Check your budgets ....

BTW: if you want a free assessment of your property STAR Report, send me a monthly Excel version and I'll provide you with my perspective.