Hotel/Motel Typical Vacancy Rates?

5 Replies

I realize that vacancy rates are going to range based on many factors, but are there any industry averages out there for hotel/motel vacancies?

Usually it's broken down by geographic region by state.

Vacancy will depend on saturation rates for the area and whether the area is tourist driven or business driven.For hotels it's all about the REVPAR,location,and age.

I would throw out national averages as it will be based on what's custom for the area.Flagged hotel/motels generally have more success than mom and pop ones.

yes- some good responses by Joel its different for each location as well as particular brand ( flag or franchise ) --

What is the purpose of this question ?

Some lenders require minimum 50% or 60% occupancy --I have also seen - mom and pop - independent hotels --more profitable in some locations -then franchsie like Days Inn or Super 8 for similar size -- say 60 units --

Also upscale hotels --like Hampton Inn, Hilton , Holdiay Inn Express has much higher occupancies in most locations

Howeevr, due to economy --and less leisure travel --many hotels lost occupanices and vaccancies are much higher and
many hotels are going in foreclosers--

Also many lenders are satying away from financing new construction at this time --and many lenders limit to only 65%
to 70% of value for refinancing whereas --few years ago 80% and 90% was common.

Joel - Thanks. That was helpful. Is there a place to find national averages?

What is the purpose of this question ?

Champak - I wanted to ask a question so I could get an answer to it. I'm curious about vacancy rates for hotels and motels.

There was a webinar video from another data company I watched a month ago.National average was about 54% occupancy nationally with REVPAR up about 4%.

I don't have the video link anymore.

Averages do not really mean anything.A brokers national average for yearly earnings could be 80,000 but many under that at 10k and many over that into the hundreds or more.

With any asset class it is deal specific.They do feel hotels have started to turn the corner.Multifamily is red hot.Retail many feel has another 2 to 3 years to hit bottom before it turns around.

Hotel lenders look to a Smith Travel Report (STR) to see what is going on in a local market with regards to occupancy, ADR, etc.

There might be some useful information for you on their website:

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