If history is a guide, the time to invest in hotels is when things look bleak. This appears to be one of those times.
Hotels and retail properties have borne much of the global pandemic’s brunt since the spring of 2020 with COVID-19 ravaging the US economy and dramatically altering consumer behaviors.
And while the challenges facing the retail sector are as much about structural change as they are about cyclical weakness, the story is notably different in the hotel sector, which remains underpinned by long-term structural growth drivers.
That doesn’t mean the picture for hotels has been rosy. In fact, as a result of the global pandemic, US hotels saw their largest-ever decline in demand in 2020—with revenue per available room (RevPAR) down approximately 47.5% compared to 2019.1 And even this striking statistic doesn’t tell the full story, as it wasn’t until March 2020 that the virus started to truly weigh on demand in the US.
On this episode of the AFIRE Podcast, Jim O’Shaughnessy, Managing Director & Hotel Group Leader of Barings Real Estate talks about the underlying structural trends for the sector, in place long before COVID, and how they will inform with the post-pandemic recovery.
Jim O’Shaughnessy is a member of Barings Real Estate, a global real estate platform with extensive capabilities across both debt and equity strategies. Jim oversees Real Estate Equity Hotel and is responsible for overseeing all facets of the Hotel Group including the sourcing, underwriting, due diligence, financing and closing of new investments; the negotiation of management and franchise agreements; and hotel asset management and disposition activities.
Prior to his current role, Jim served as Senior Vice President of the Real Estate Hotel Group. Jim has worked in the industry since 1988. Prior to joining the firm in 2000, Jim worked for the North American hotel division of Accor as a Regional Operations Manager responsible for a group of full-service hotels in the southern and eastern regions of the U.S. and as a General Manager in full service hotels in Texas and Canada.
Jim also worked for Hyatt Hotels & Resorts. Jim holds a BA in Government from Dartmouth College and an MBA from Harvard Business School.
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