Each year, HVS reviews and analyzes the Canadian hotel lending environment following a comprehensive survey. With the unprecedented change that 2020 has brought, this year’s survey looks to gain clarity on the current lending environment and the overall health of the hotel finance sector across the nation.
Through Q3 2020, RevPar in Canada continues to deteriorate, declining 61% over 2019. Hotels in the luxury segment and those with more than 500 rooms have taken the brunt of the impact. Covid-19 is not affecting markets uniformly across the country. The Okanagan and Northern Ontario markets have fared best with decreases of 33% and 35% while the hardest hit market, Downtown Montreal has a RevPAR decline close to 80%. With the pandemic not slowing, we don’t foresee improvement until the spring.
Before investing millions of Rupees of expensive capital, it is prudent to spend an insignificant fraction of the sum on Feasibility and ROI Studies for a hotel and/or a mixed-use project to help determine the viability of the project. The rapidly evolving consumer behavior and demand fundamentals are expected to make a professionally prepared feasibility study even more critical than ever before.
Since mid-summer, we have re-appraised 140 hotels that we valued in the years and months leading up to the onslaught of the COVID-19 pandemic in March 2020. Not every hotel has lost value, but value declines have predominantly fallen in the range of 15% to 30%.
Since early March, metro Denver-area hotels have suffered unprecedented declines in demand, similar to most cities in the United States, because of the COVID-19 pandemic. How far has the Denver hotel market fallen? How does this compare to the last recession? What will the recovery look like?
Following waves of asset of appreciation, the pendulum has swung, and many hotels will be facing significant value declines in the current economic climate. As owners look for every way to reduce operating expenses, they should remain vigilant to pending fluctuations in real property assessment levels and proactive on appealing their assessments, if warranted.
A review of how European hotels have been affected by COVID-19 thus far and a forecast of the expected recovery over the next few years. This article also explores the factors that will influence willing buyers and sellers and looks at different scenarios to assess the evolution of EBITDA and value ranges.
Note: This article first appeared in Bird & Bird's quarterly newsletter.
In the coming months, a true gem of a site in the heart of Hong Kong will be sold. Located in front of its iconic skyline, Site 3 measures 4.76 hectares between Jardine House (the one with the round windows) and the Star Ferry pier. We take a look at what could be accomplished here.