For the first-time hotel investor, mid-priced and economy properties offer better price opportunities, Webb agrees. "Undoubtedly, there is more opportunity today in the higher-quality, limited-service product and the mid-priced hotel group than in the ultra-luxury segment," he tells GlobeSt.com. "The cost of entry is much more attainable for the typical investor."

Replacement costs are a crucial factor in any property investment but not the only factor, Webb notes. "If the investor's benchmark for determining value is replacement value, then he or she must first ask the question, 'Would I build this facility in this location today?'"

Replacement costs continue to escalate in the lodging industry as they do in all other real estate development, Webb says. "However, capitalization rates have remained in a constant range over the past several years," he notes.

"Essentially, budget properties have moved in a 10.5% to a 12.5% (range), depending on age, location and condition," while luxury property "tend to change hands on the lower end of that range."

He adds, "It is important to note that luxury properties more often sell through partial or entire portfolio transactions, whereas most limited service sales occur on a property-by-property basis."

Cash flow is just as important a factor as replacement costs when considering a hotel investment, Webb says. "Because hotels are an income investment, hotels generally sell on the income stream, or lacking sufficient income, will sell on a comparable price per unit."

He notes, "Purchasers are driven by reliable, predictable cash flow, based on historic performance and by the opportunity to enhance appreciation by market repositioning through renovations and brand changes.

"And, with current impact fees and land costs increasing, you can expect to see more older, well-located properties acquired for the purpose of demolition and redevelopment when the market returns to good health," Webb tells GlobeSt.com.