Lodging pundits and people involved in the industry will continue to try to sell you that the lodging industry is doing great, and has been, and will continue to for many years. The hospitality pundits and appraisers have been selling the fiction since 2016 that the industry would be doing great through 2019. They have had to materially modify their story lines since then because the numbers were simply not happening to support the fiction they were putting forth. Their projections made in 2016 for 2017-18 were off by 50%, or more.

Here is the dirty little secret about all the pundits, appraisers, and brokers in the hotel industry. The pundits and STR are pressured heavily by these people and Wall St who have a financial vested interest to make things sound better than they really are, and to project them to continue to be very good so that buyers will buy hotels and lenders will lend more than they should. Appraisals are invariably falsely optimistic unless done for bankruptcy hearings or other reasons where a low value is needed by the client. Then the values are magically low. Having been an expert witness in numerous hotel trials, it is always hysterical to listen to the opposing appraisers try to convince the judge that their value is correct, even though the high and low are way far apart. This is just further proof that appraisals are really MAI- made as instructed, and just a bunch of manipulated assumptions that have no real basis in fact. I used to be a speaker at most of the lodging conferences, but finally one of the conference sponsors told me I could no longer speak because conferences are designed to be optimistic sales programs, and my reality check comments about how the industry was going to flatten out after 2016 were not welcome, and that sponsor is a good friend of mine.

Did you ever wonder why STR and the pundits only provide Revpar numbers and not cash flow? It is because Revpar generally does rise, even if only by inflation, so they can make things sound better than they really are. To me, it is net cash flow and cash return on invested equity that matters, not Revpar. Even revenue numbers are not reported fully as they are often gross revenue and not net revenue after OTA commissions, which are eating as much as 25% of OTA booked revenue in some cases.