HOUSTON—According to Marcus & Millichap Real Estate Investment Services' Hospitality Research Quarterly Update, the hotel sector continued benefiting from extraordinarily constrained supply and rising demand during Q2 2012. Interestingly enough, though occupancy was reported at 61% (versus 60% during the same period of 2011) and the ADR's annual change was 4.3% above where it was a year ago, demand growth was at 2% (versus 5% year-over-year) and revenue growth stood at 6.4%, down from 8.9% from the year before.

But don't panic, says David Luther, vice president and national director of Marcus & Millichap's National Hospitality Group. It's not necessarily a bad thing that revenue growth and demand growth are lower. "They were so low in 2009," he explains. "As things picked up in 2010 and 2011, we frankly experienced abnormally high growth in demand and RevPAR. These will be normalized as we move forward."

He notes that a RevPAR annual change of 6% is nothing to sneeze at. There hasn't been a whole lot of product coming onto the market, he explains; though lenders are willing to finance existing product (especially if the borrower has a strong hospitality resume), funding for new construction simply isn't out there. Though some new supply is coming online for national chains such as Holiday Inn and Best Western, demand continues to outpace supply. "One interesting factoid in the report: 17 states reported that, rather than new rooms coming on line, there were drops in available rooms," Luther says.