An Analysis of Hotel Real Estate Market Dynamics

Mark Gallagher () and Asieh Mansour ()
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Mark Gallagher: John Hancock Real Estate Investment Group Boston, MA 02117, http://www.jhancock.com/
Asieh Mansour: The RREEF Funds San Francisco, CA 94111, http://www.RREEF.com/

Journal of Real Estate Research, 2000, vol. 19, issue 2, pages 133-164

Abstract: After providing a conceptual analysis of national hotel cycles, metro level hotel market dynamics are examined using various measures of supply and demand volatility, and historical revenue per available room (REVPAR) performance. Cluster analysis is used to provide a more rigorous classification of hotel markets in relatively homogeneous groups. A clustering algorithm is applied to REVPAR growth across fifty-eight metro areas. Using discriminant analysis, each cluster is then linked to various economic characteristics. Five hotel market clusters are identified with differences in various employment location quotients, employment SIC categories and employment growth largely determining the cluster groupings. This analysis can be used to improve hotel portfolio diversification strategies for both real estate investment trusts and direct-side equity investors.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 2000
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