HVS' 1999 Hotel Report.

Stephen Rushmore, president and founder HVS International, a leading global hospitality consulting and hotel appraisal firm, recently published the 1999 Hotel Transactions Survey - an analysis of the major hotel sales in that calendar year.

"This analysis shows us that in 1999, more hotel companies purchased individual sets rather than large packages of hotels," says Rushmore. "While the volume of hotel sales in 1999 is less than half of that which occurred in 1998, the average sale price per room increased to $142,000 per room - the highest point on record."

"The high level of acquisition activity that occurred between 1996 and 1998 has certainly tapered," adds Stephen Hennis, director of research for HVS International, who co-authored the study with Rushmore. "Rather than buying properties simply to increase the size of their portfolios, companies are now buying for more strategic purposes. Furthermore, several of the major buyers from prior years are divesting of non-core assets that do not fit their portfolios.

The number of hotel portfolios that sold in 1999 is also less than in previous years. Moreover, the majority of hotel portfolio sales consisted of limited-service properties. "The trend toward portfolio transactions primarily of limited-service hotels are expected to continue, while upscale and luxury hotel sales are anticipated to be individual property transactions," adds Hennis.

Leading the 1999 list of major buyers of hotels (based on dollars spent on acquisitions) is Berkshire Hathaway and U.S. Realty Advisors - based purely on their one portfolio acquisition. Other companies that spent significant amounts on hotels acquisitions in 1999 include: Strategic Hotel Capital, Hospitality Properties Trust, Hilton Hotels, CNL Hospitality Group, and Meri-Star Investment Partners. Companies like Host Marriott and Starwood, who were two of the major buyers in 1998, spent the year selling properties in order to better position their portfolios.