The COVID-19 pandemic has brought unprecedented disruption to the U.S. lodging sector. Travel restrictions, quarantines and global air travel pullback have rocked hotel fundamentals. How will that disruption affect both recovery and hotel investors?

COVID-19 pandemic disruptions include:

What insight are our Capital Markets thought leaders providing?

There is distress emerging from this pandemic:

What will the recovery look like?

The market turbulence represents opportunity for astute investors for the foreseeable future. The recovery in the hotel market is not a matter of if, only when. We believe in a strategy of “flight-to-quality” acquisition of newer, premium-branded Midscale, Upscale, and extended-stay hotels in markets with diverse demand drivers. Despite the current price discovery challenges, the quality-focused intuitive and aggressive buyer with access to capital will thrive.

New development remains attractive, although caution is advised. There are 215,000 rooms under construction, more than the previous peak in December 2007. New hotels with the latest technology will command a market premium. Inevitably, distressed hotels will be offered as viable hotel acquisitions, but buyers must be sure that investment targets have upside in branding, CAPEX and management.

About the Authors:

Rich Lillis, Executive Managing Director Hotels | USA, is a leading expert providing strategic advisory services to clients on hotel and resort investment sales and financing in Florida, the Eastern U.S. and the Caribbean. As a frequent speaker at national hotel investment conferences ALIS, NYU and NABHOOD, Rich offers a unique perspective from his deep experience and diverse lodging background.

As the Managing Director, Research & Client Services | Boston, Aaron Jodka oversees all aspects of the Client Service offerings, including Research, Marketing, Graphics, Financial Analysis, Lease Administration and Client Service Coordination. He assists brokers with pitch preparation and delivery, while continuing to push the Colliers brand via best-in-class research reports, thought leadership, and contributions to numerous panels, media, and industry events.