Hotel & Lodging Financial Advisory Services Update – July 2023

Issues and Perspectives of Hotel Asset Management Post Pandemic

Capstone Partners released its Hotel & Lodging Financial Advisory Services Update, exploring the current and future state of hotel asset management in the Lodging industry. The Lodging industry was, by most measures, one of the hardest hit by the COVID-19 pandemic, as global shutdowns derailed leisure and business travel for a prolonged period of time.

The year 2021 showed signs of a recovery that was bolstered by pent-up demand. Additionally, growing optimism around COVID vaccines and treatments emerged, driving last-minute bookings at a pace never before seen in the sector. Yet the current recovery has been stressed by macro elements of supply chain issues, global political environment, high wages, inflation, and high interest rates. Although occupancy has yet to fully recover, average daily rate (ADR) growth has been favorable. As of year-end 2022, revenue per available room (RevPAR) has tracked back to 2019 levels and has surpassed CPI (Consumer Price Index) growth, according to Smith Travel Research. But will it hold?

“While domestic occupancy rates have largely rebounded since the pandemic, that isn’t the only headwind facing the Lodging industry,” said Sabena Arora, report author and a Senior Advisor in Capstone’s Financial Advisory Services (FAS) Group. “Understanding the overall root causes and the probable trajectory of the fate of this sector is critical to formulating a plan to manage through the current turmoil.”

Capstone has represented numerous companies in the Hotel & Lodging sector and has the extensive industry knowledge needed to help owners and stakeholders address challenges and capitalize on opportunities. Our report examines the major trends and explores how they may impact the near- and long- term outlook for companies and investors in Lodging and other related industries. Also included in this report:

• Root causes of volatility and ongoing impact on sector performance.
• Intersection of pressures and challenges facing multiple industries including Travel, Commercial Real Estate, Services, Franchised Businesses, and Ecommerce.
• Trends to look for in valuations, working capital, and financing.
• A Capstone Case Study revealing the challenges of a Commercial Real Estate Developer client, with insights into the services provided and outcome achieved by the FAS Group.

Capstone Partners has developed a full suite of corporate finance solutions, including, financial advisory services, merger and acquisition advisory, debt advisory, and equity capital financing to help privately owned businesses and private equity firms through each stage of the company’s lifecycle.

To learn more about Capstone’s wide range of advisory services and Hotel & Lodging sector knowledge, please contact us.