GlobalHotelNetwork.com: Where do you see the best opportunities for hotel investment or development?
Robin Webb: With over seventy-five million visitors in 2018 (9 million more than the population of Great Britain), Orlando’s hotel occupancy was one of the highest in the nation at 79.2%. The market’s average daily rate climbed slightly again in the period. While forty-one hotels changed hands in the metro market, supply grew by 2,700 room or about two percent (2%) demand growth, however, continues to exceed three percent (3%) year over year. It is anticipated that supply will, again, grow at a rate of two percent (2%) in 2019, suggesting an even higher market-wide occupancy in 2019.
The opening of new attractions in Central Florida implies greater strength in the market in 2019 and 2020. Legoland has announced the opening of its new park. Walt Disney World is scheduled to open Star Wars: Galaxy’s Edge, which will certainly spur visitation even more. Many are predicting the impact will be similar to the Universal Orlando’s Wizarding World of Harry Potter opening in 2010 which generated over two million new visitors to the market.
The first quarter of 2019 continued the robust performance within Orlando’s lodging industry. Fed by a six percent (6%) increase in traffic at Orlando International Airport, occupancy was 82.2% and average daily rate reached $134.52 during the period.
Sales prices have reflected the success in operations in the market. Numerous sales closed at some of the highest prices on record in 2018. The Hilton Garden Inn at Sea World sold for $138,000 per room while a pair of Marriott properties (252 rooms) sold in excess of $190,000 per unit. The record, however, was set by the sale of the Grand Lakes Resort (998 room JW Marriott and 582 room Ritz Carlton) at $550,000 per unit! During the first quarter of 2019 nine hotels sold with capitalization rates ranging from 7.8 to 10.5%. Undeniably, the Orlando market is stable and growing, offering significant opportunities for new investment.