In the world of hotel real estate, the best markets and the best investments 120 days ago are now among the worst markets and the worst investments. The blog title is “move over darling” because what were the darlings of the industry are now the duds of the industry.
One market in particular is Nashville Tennessee. 120 days ago, everyone wanted to own a hotel in Nashville and now many of the hotels in Nashville are closed and the ones that are open, are running less than 8% occupancy. Some of the Florida Beach markets, 120 days ago were known as the redneck riviera and very few investors wanted any part of it. Now, those markets are running the best numbers in the country because people can drive there.
Who would have imagined in early February that the world of hotel real estate would literally turn upside down? It has been the most significant shift in the industry in my 30 years.
The point is that we should always recognize that things change, shift and evolve and very few things in life stay the same. Look at transportation as an example. In the late 1800’s and early 1900’s cities were building lavish train stations all over the country because it was viewed as the future of travel. Well, now most of them are just old dilapidated mothballed buildings. The world changed with automobiles and airplanes and train travel became less and less of a factor.
There is no industry, no market, no business model that is immune from change. The best you can do is hope you see it before it gets there. KT