An improving Triangle economy and rising consumer confidence is boosting the local hotel industry to heights not seen since prior to the recession.
“The corporate demand and the leisure demand at our hotels, we’re seeing at 2007 levels,” said Amit Patel, president of Morrisville-based Winwood Hospitality Group, which operates three hotels in Raleigh and is about to open a fourth. “In my opinion, we have fully recovered from the downturn.”
After years of watching room rates languish even as occupancy ticked up, many hotel owners say they are at last in a position to push room rates.
In Wake County, revenue per available room, or RevPar, through the first four months of the year was $66.38, up 10 percent over the same period a year ago, according to STR, a Tennessee company that tracks the lodging industry.
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“We are finally in a position to drive RevPar through rates,” Patel said.
Such growth is helping to fuel hotel sales. The total volume of hotel transactions in the U.S. is expected to increase 18 percent this year to $31 billion, according to JLL. RevPar is forecast to rise 7 percent.
The most eye-popping local sale took place last month when the sovereign wealth fund of the government of Abu Dhabi paid $79.91 million, or $349,000 per room, for the Renaissance Raleigh North Hills. That type of valuation is typically reserved for premier hotel properties in larger markets.
Patel attributed the rapidly improving market, particular the rise in leisure business, to several factors. Consumer confidence, pent-up demand and low fuel prices have made families more willing to travel.
The increase in demand is also leading to more new construction. There are now six hotels under construction in Wake County and five hotel projects at various stages of development in Durham.
Last month, Winwood and North Point Hospitality Group paid $1.7 million for a .75-acre lot in Kite Realty’s Parkside Town Commons development in Cary. The joint venture plans to break ground early next year on a 120-room Courtyard by Marriott.
Winwood is also about to open a 149-room Hilton Garden Inn at Crabtree. The company opened a Hampton Inn and Suites on the former site of the Crabtree Inn in 2013, and also operates two hotels in Raleigh’s Brier Creek area.
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