CHICAGO-As 2,400 experts attended the first portion of the three-day Americas Lodging Investment Summit Monday in Los Angeles, locally based DLA Piper released a survey of their peers that shows most still are bullish on the industry in 2012. However, of the roughly 100 experts interviewed by DLA, fewer are favorable on industry fundamentals compared to 2010 estimates, the law firm tells GlobeSt.com.
In 2011, about 88% of a previous survey respondents were bullish on the hotel industry, according to DLA. This year the number of bullish responses dropped to about 80 respondents out of 100, says Sandra Kellman, global co-chairman of DLA’s Hospitality and Leisure practice.
“Last year there was just this crazy euphoria at the start of the year, it seemed like people thought the world had been reborn,” Kellman says. “It turned out to be somewhat irrational exuberance. But the fact that there’s still 80% confidence this year is still favorable.”
Whereas nine out of 10 respondents to this year’s survey think that there will be good buying opportunities, only 47% of respondents expect hotel asset values to rise this year, down sharply from the 82% of respondents in 2011 who thought values would increase. Private equity investment is supposed to jump, however, as REITs continue to lick wounds from this past summer.
“My sense is that the hotel industry will ease around between the success of the first half of 2011 and the decline of the second half,” Kellman says. “Looking ahead, it is clear that the industry expects that there will be some deal velocity, although it may be choppy.”
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