The performance of U.S. commercial mortgage-backed security (CMBS) hotel properties will likely stabilize as revenue per available room (RevPAR) continues to rebound from its 2009 trough, Fitch Ratings report. The hint of stability is basis for cautious optimism for the performance of hotel properties in CMBS transactions, Fitch says.
The rating agency expects further RevPAR growth of 5% to 7% this year and similar growth in 2012. Following the RevPAR decline of 17% in 2009, U.S. industry-wide RevPAR grew 5.4% in 2010, but remains 14% below its 2007 peak. Growth in the industry-wide average daily rate has been consistently positive since mid-June 2010.
‘Increased business travel from the improving economy drove the better-than-expected demand recovery,’ says Managing Director Eric Rothfeld. ‘Although the outlook for U.S. consumer spending remains constrained due to high unemployment, the financial health of the corporate sector has improved significantly, further boosting business travel.’
In spite of the positive developments, Fitch remains cautious regarding the cyclical nature of the lodging industry. ‘The pace of the global economic recovery will impact the industry outlook, as influenced by corporate profits, unemployment and the capital markets environment,’ Rothfeld adds.
SOURCE: Fitch Ratings
