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Top Ten Reasons to Build or Buy a Hotel Now
From:
Dennis P. Gemberling -- Hotel and Restaurant Expert Dennis P. Gemberling -- Hotel and Restaurant Expert
San Francisco , CA
Thursday, March 28, 2013
 
 Are you looking to buy a hotel or build your own? There are many reasons why you should do it now and they include:

1) Low interest rates continue - The federal government has recently decided to keep the interest rates low. This means you can buy a hotel and the cost of debt cash will be cheaper. Aside from this, there are signs that some lenders are beginning to create hospitality sector loans.

2) Rising valuations - Cap rates in recent history were never that high and beginning to drop so this is a good time to get in and reap the benefits later on.

3) Favorable economic factors - The lodging industry is currently rising even in this recession.

4) Up cycle is now - The recession began in the year 2007 and the cyclical duration for hotels is typically about seven to ten years. This means that the hotel industry is already experiencing growth again.

5) Arrival of the Chinese - Asian investors are looking to buy and build hotels here. They are long term investors who are patient. They will not have a problem forking out large chunks of cash to acquire a hotel. If you dream of owning one, better get to it before the Chinese do.

6) Occupancy rates and revenues up - Average occupancy and room rates are going up to where it once was before the recession hit.

7) Rise in number of tourists - If you are looking to buy a hotel it is now or never because there is an increase in the number of tourists in many markets. Tourists usually like to stay in good quality hotels and if you provide these types of sleeping facilities in a market where few exist, that would be even better.

8) This is a business that never goes out of business - The hotel industry never really stagnates. People need to travel regardless of how the economy is. Much of your success will depend on the placement, management and marketing of your hotel. Take advantage of vastly populated business areas where people will need to go for meetings, conventions, clients and attractions.

9) Hotels are stable - With the right amount of hard work, along with good management and marketing, most hotels hit a stabilized income within the first 2 to 3 years.

10) Limited new construction – Supply is not keeping up with demand in many markets. This is an opportunity to build a new hotel or a buy a hotel and expand it. Many cities and shopping center developers are helping those who want to build and buy hotels so that they can reap the benefits too.

 
 
Dennis P. Gemberling
President
Perry Group International
San Francisco, CA
1.800.580.3950
 
First Url: Hotel Investors
 
Second Url: Buy a Hotel
 
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