Despite strong hospitality numbers in 2019, hotel developers may need a pep talk heading into 2020. The U.S. hotel industry reported record-breaking performance numbers last year. In 2019, average daily rates increased by 1% and revenue per available room, or RevPAR, rose by 0.9%. Despite these numbers, STR and and Tourism Economics, the benchmarking group many lenders use to determine how they should loan to hospitality projects, downgraded its 2020 forecast for U.S. RevPAR growth.
Many hotel developers have been left wondering if they will be able to secure financing for upcoming projects. But if developers do their research and find the right partner, they may still be able to find the capital they need.
“There are many types of lenders out there today that can provide creative financing for hospitality projects,” said Lori Tirado, managing director of business development at Access Point Financial, an Atlanta-based hospitality lender. “The key is to clearly lay out your goals for the future and find a lender that shares your vision.”
Bisnow recently sat down with Tirado to learn about the RevPAR downgrade and what steps hotel owners and developers can take to keep their projects afloat and boost their revenues in 2020.
Bisnow: Why is RevPAR so important?
Tirado: RevPAR can be an indicator of a hotel’s performance and whether it is able to fill its rooms. RevPAR isn’t a perfect measure of success, however, since it fails to take into account the size of a hotel. A hotel could have a lower-than-average RevPAR but still boast plenty of rooms that bring in higher revenues.
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