NEW YORK CITY—2015 was a banner year for the US lodging industry. Sector fundamentals have never been stronger, and at this juncture hotel property values have generally exceeded prior peak levels in most markets across the country.

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Mergers and acquisitions of individual hotels, portfolios, and corporate consolidations occurred at a blistering pace reaching a crescendo with the late year announcements of Marriott International's blockbuster acquisition of Starwood Hotels & Resorts Worldwide, Inc., Accor SA's purchase of FRHI Holdings Ltd which includes Fairmont, Raffles and Swissôtel, and Hilton Worldwide Holdings' plan to separate its real estate assets into a publicly traded entity. One prevailing theory is that hotel operating and real estate companies are bulking up to defend themselves against the growing heft of online travel agencies such as Expedia Inc. and against competition from home-rental companies such as Airbnb Inc. M&A activity has also been fueled by the fact that although stellar industry operating performance achieved during 2015, for the most part during the latter half of the year publically traded hotel REITs experienced a decline in enterprise value and have been effectively relegated to the sidelines of the acquisition arena. The recent arbitrage between public REIT share prices and the underlying value of their properties will lead to privatizations similar to Blackstone's year end acquisition of Strategic Hotels & Resorts, Inc.

The LW Hospitality Advisors (LWHA) 2015 Major US Hotel Sales Survey includes almost 200 single asset sale transactions over $10 million, none of which are part of a portfolio. These transactions totaled roughly $14 billion, and included approximately 53,000 hotel rooms with an average sale price per room of $265,000. By comparison, the LWHA 2014 Major US Hotel Sales Survey identified 152 transactions totaling roughly $16 billion including 45,000 hotel rooms with an average sale price per room of nearly $350,000. Comparing 2015 with 2014, the number of trades increased by more than 25 percent while total dollar volume declined roughly 12 percent and sales price per room decreased by 24 percent. It is important to note that the 2014 data is skewed due to the inclusion of the two extraordinarily large sales, namely the $1.73 billion trade of the Cosmopolitan Las Vegas and the $1.95 billion sale of the Waldorf Astoria in New York.

Forty major sales occurred in the State of California, followed by 36 in Florida, and 19 in New York. Sixteen major sales occurred in the New York City area, followed by 12 in Boston, 8 in San Diego, 7 in Chicago, 7 in Miami/Miami Beach, and 6 in Orlando.