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| An Analysis of Hotel Real Estate Market
Dynamics Author: Mark Gallagher and Asieh Mansour Start Page: 133 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. |
