Well known hotel brands, such as InterContinental Hotels Group, are looking to divest themselves of what they have left of real estate. Such companies have transformed, since the 1980s, from landowners and operates to mainly just operating and managing properties owned by real estate investors. As this seems to be a more favorable way of running their business, managing not owning, many hotels are likely to change hands these next years depends on which real estate investors buy the properties. Now that the hotel industry is slowly but surely regaining its former strength, corporations believe its a smart time to get rid of the burdens they have remaining at a fair price. From 2009-2011 hotel ooccupancy rates are expected to rise 4.1 percentage points and revenue per room is expected to rise 10.8%.
This change from owning to managing will now define more clearly the roles of hotel companies in the market. These companies will no longer need to worry about the real estate side of their operations and will mainly focus on service and presentation. This could lower their operating costs, therefore, lowering prices to consumers. Hotel company will be paid by real estate owners and investors to operate their properties and so the hotel company's risk of losses in another recession are greatly minimized. Real estate companies will also benefit because most properties that the large corporations have to sell are extremely significant one with extreme potential for growth in the coming years.
http://online.wsj.com/article/SB10001424052748703720004575478214068058370.html?KEYWORDS=hotels+poised+to+shed+properties
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Good Post.Taking out the land and real estate management of owning a hotel allows more time and energy to be invested in ways of increasing revenue as well as improving the overall hotel experience. Also this benifits both parties involved.
ReplyDeleteKyle davis