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Short-Term Rentals Make Long-Term Impact on Hotel Valuations
Even as the short-term rental (STR) sector sees slower growth, the sector’s influence is impacting traditional hotel valuations as the industry reconsiders valuation methods, CBRE reported. The U.S. STR industry will expand to roughly 650,000 actively rented units this year, equal to 12.2% of the country’s hotel-room supply.
“The industry used to essentially ignore the impact of STRs when assessing a hotel’s value, but not anymore,” said EVP Tommy Crozier, who leads CBRE’s National Hotels Advisory Practice. “It’s clear that STRs can have a direct and meaningful impact on hotel performance and asset values. The impact might be more pronounced in some submarkets than in others, contingent on conditions, but it is a legitimate impact nonetheless.”
Although still in double digits, the STR sector’s projected growth for 2020 is 19%, down from 26% in 2019 and 39% in 2018. That’s due partly to growing from an increasingly larger base.
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