This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.  Find out more here  Close
Don’t forget about full-service hotels
August 29 2013

Hotel executives are mad for select service these days, but they’d be crazy to forget about full-service hotels.

Highlights
  • Watching others descend into select-service madness is a helpless feeling.
  • Year-to-date performance for full-service is actually slightly better than for select service.
  • Laurus Corporation is going against the grain in looking for full-service deals.

During the past couple years I have watched, helpless, as the hotel industry has descended into a state of select-service madness.

It started slowly. A Courtyard by Marriott sold here; a Hampton Inn & Suites acquired there. But as time progressed, executives in the industry apparently became hell-bent on providing everyone with a free continental breakfast. It’s gotten to the point where I’m thinking it might be easier on my fingers if I just add keyboard shortcuts for the words “Courtyard” and “Garden.”

It doesn’t appear my fingers will be getting a rest anytime soon, either. Hotel investors such as Supertel Hospitality and Waramaug Hospitality LLC are just two of the companies that are re-jiggering portfolios to get a piece of the select-service market.

I understand the appeal. Select-service hotels have shown reasonably strong performance. Year-to-date through July, U.S. select-service revenue per available room is up 5.6%, while average daily rate is up 4%, according to data from STR, parent company of Hotel News Now. The hotels also are less expensive to develop and have a lower expense level than their full-service brethren, which helps the bottom line.

All that said, I wouldn’t turn my back on full service just yet. As Austin Khan, chief investment officer at Laurus Corporation, told me recently, full-service hotels have “more levers to pull” than select service when it comes to building the hotel’s revenue base.

His company is going against the grain by looking to bulk up its stock of full-service hotels. The price point at which hotels can be acquired is also compelling, Khan added.

Need more proof as to why you shouldn’t turn your back on these full-service behemoths? Remember what I said a little earlier about performance? Well, full-service RevPAR is up 5.8% year-to-date through July in the U.S., while ADR is up 4.2%, 20 basis points higher than the mark for limited service.

Bottom line: Don’t turn your back on full-service hotels. They’re not going away anytime soon.

Tweet of the Week
Speaking of hotel transactions, there are still good deals to be had as illustrated by the tweet below.

Email Shawn A. Turner or find him on Twitter.

The opinions expressed in this blog do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.

COMMENTS   Show All
Login or enter a name   Post Your Comment  Check to follow this thread via email alerts (must be logged in)
(4000 characters max)

Comments that include links or URLs will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff

TRENDING
TripAdvisor: From review site to booking giant
Spain’s hoteliers urge action against Airbnb
How to effectively, legally remove a guest
Two-pack twist makes for strange bedfellows
Hoteliers can learn from Airbnb’s rebrand
8 ways to steal more market share
VIDEO
NYU Investment Conference Recap
Hunter Hotel Conference postgame wrap
Bazin outlines Accor investment strategy
Accor's Bazin talks growth
Sébastien Bazin's view from the top
LATEST NEWS
Hotel Acquisition Funds List
Are you ready for M&A fever?
MICE hotel demand weathers economic storm
ADIA hotel head lays out growth strategy
STR: US hotel performance for June 2014
How to implement a rooms upselling program
Contact Us
Hotel News Now
18500 Lake Rd.
Suite 310
Rocky River, Ohio 44116
        
Copyright © 2004 - 2014 Hotel News Now, a division of STR, Inc. All Rights Reserved.   Privacy