Hotel Capitalization Rates Generally Flat According to USRC Hotel Investor Survey Mid Year 2016

Two construction cranes
Hotel Capitalization Rates Generally Flat

US Realty Consultants, Inc. has released its Mid Year 2016 Hotel Investor Survey, which the company has provided for over twenty years.

The results of our Mid Year 2016 Hotel Investor Survey continue to show strength in investor interest in the hotel sector, but overall investment parameters have generally flattened. Most capitalization and discount rates were slightly stronger than the last survey (Winter 2016), but similar to the results a year ago. Full-Service hotel capitalization rates declined by a modest 10 basis points, while limited-service rates dropped by 30 basis points. The rates are similar to the Mid-Year 2015 survey a year ago, which were the lowest in the twenty-plus history of the USRC Hotel Investor Survey.

In perhaps the biggest change in the survey, ADR growth expectations are down significantly. For both full-service and limited-service hotels, overall ADR growth expectations are only slightly higher than expense growth expectations.

The complete survey, including data on capitalization rates, discount rates, ADR and expense growth expectations, marketing time, and other data for both full-service and limited-service hotels, can be ordered through the company’s website at, and clicking “Publications.”

Jeffrey H. Walker, MAI, CRE is Principal and Managing Director of US Realty Consultants. He is a 1985 graduate of James Madison University and has been involved in the hotel and restaurant industries since the 1970s. He spent much of his early career with Hyatt Hotels and Resorts, and has been a hotel consultant since 1992. He is involved with hundreds of hotel analyses annually for national lenders and major institutional clients, and is a frequent speaker at national conventions. He can be reached at 614-221-9494 (ext 150) or at