Analysts Predict Orderly 2002 Hotel Market; Panic Selling Doubtful

NEW YORK CITY-New research from lodging investment services group Jones Lang LaSalle Hotels draws parallels between the current hotel market and that of the early 1990s. And while the data for 2002 suggests fewer lodging transactions, falling prices and decreasing cap rates, Jll sees an orderly transaction market this year dominated by value investors and little panic selling..

“Capital flows to real estate have been declining since their peak in 1998; however, they remain at high levels relative to historical standards,” says Alan Tantleff, executive vice president of Jones Lang LaSalle Hotels. “As an industry, we appear to be in much better shape today than we were in 1990, and while not a perfect parallel, 1990 was, in fact, the United States’ last recession. In 1990, we had weak fundamentals–high inflation, weak GDP growth, declining profit margins, and most importantly, negative outflows to real estate.”