HVS: US Hotel Valuation Index 2009

The 2009 publication of the HVI marks an unprecedented time for hotel values. As markets fluctuated wildly throughout the past year and major banking institutions folded, hotel demand dropped dramatically, and average rates soon followed suit. The trend has continued into the summer, rendering prior forecasts for a ‘quick recovery’ defunct. To understand the 2009 HVI values and corresponding forecasts for each market, it is important to understand the context in which the values have been derived.

The Hotel Valuation Index (HVI) tracks hotel values in 65 major markets and the United States as a whole. Created in 1987 by HVS, the HVI is derived from an income capitalization approach, utilizing market area data provided by Smith Travel Research (STR) and historical operational information from HVS’s extensive global experience in hotel feasibility studies and valuations. The HVI for 2009 is based on 2008 data; we note that each market has been evaluated and forecast based on prevailing and anticipated trends specific to that market.

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