Hotel revenue, profits increase while transactions slow.


U.S. hotel industry revenue topped $189 billion in 2015, up nearly $14 billion from 2014, reported STR, Hendersonville, Tennessee. Hotel sector profits increased 9.4 percent year-over-year to more than $72 billion, STR said.

"Industry revenues and profits continue to reach record highs [and] we saw profit margin finally surpass the previous peak from 2007," said STR Director of Financial Performance Joseph Rael. "Of course, at this point in the cycle, we're seeing both revenue and profit growth starting to slow, and we expect growth to continue to taper over the next couple of years as well." Adjusted for inflation, the industry's 2015 revenue surpassed 2007's prior-peak levels but remained below 2000's peak, Rael said. Similarly, the house profit realized in 2015 represented the second-best profit level since 1990, behind only the peak $15,248 per available room in 2000.

Hotel transaction activity started the year off slowly, reported Lodging Econometrics Inc. (LE), Portsmouth, New Hampshire. Just 252 hotel properties changed hands in the first quarter--the lowest transaction volume since 2012--and LE reported seeing no merger-and-acquisition activity. Portfolio transactions fell to their lowest point in four...

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