United States -  Cincinnati

Overview:

Cincinnati is located on the southeastern Ohio border along the Ohio River. The metropolitan area encompasses a three-state region, including parts of Indiana and Kentucky. Top firms in Cincinnati represent key industries such as aerospace, automotive, biotechnology, brand design, creative services, chemistry, financial services, IT services, and consumer goods. Together, these sectors have helped fortify the city’s economic position in recent years, allowing the city to be somewhat buffered from the major fluctuations that other cities experienced during the recession. The city has been successful at not only retaining area businesses, but also at attracting new establishments. The area’s low cost of living, aggressive development incentives and excellent accessibility via multiple transportation routes have brought national recognition to the MSA. Furthermore, the greater Cincinnati area ranks in the top ten for the number of Fortune 500 and Fortune 1000 companies per million residents, which is a positive reflection of the region's strong economy and the city's high quality of living. In 2016, FC Cincinnati began its inaugural season in the United Soccer League. The team, which plays at Nippert Stadium on the University of Cincinnati campus, has been praised league-wide for setting attendance records.
 
Limited sales volume occurred in Cincinnati in 2014 and 2015, with eight hotel sales recorded at a sales price averaging just under $30,000 per room. However, we note that the Hyatt Regency Cincinnati and the Great Wolf Lodge Mason sold for undisclosed sums during this period. Downtown Cincinnati is experiencing record occupancy and average rate levels, bolstered by the strong commercial, convention, and tourism sectors downtown. The market area, which had relatively little new supply open in the five years prior, absorbed several new hotels in 2014 and 2015, including a Renaissance hotel in 2014 and a dual-branded Homewood Suites/Hampton by Hilton in 2015. Furthermore, record occupancy and average rates have spurred new developments Downtown; an Autograph Collection, an AC by Marriott, a Holiday Inn & Suites, and two boutique hotels are also proposed for Downtown Cincinnati. With the opening of these properties, the overall condition and quality of the guestroom product in the downtown market will improve, and almost every other property has been considerably renovated in recent years. Furthermore, the recently sold Garfield Suites Hotel is expected to close in the summer of 2016 in order to be converted to apartments. The change to supply will certainly affect occupancy levels in the CBD; however, the strength of the area’s commercial employers, new development occurring Downtown, and the city’s strong convention and tourism markets will prevent occupancy from falling significantly as the new supply comes online by 2017. These factors should contribute to modest gains in values through 2017.
 
* The HVI is an index, a statistical concept reflecting a measure of the difference in the magnitude of a group of related variables compared with a base period. As such, it is a measure of broad market trends, rather than a conclusion as to the specific value of any asset, and cannot be applied to an individual asset. A good comparison is the Consumer Price Index. While this index provides a reliable measure of the overall rate of inflation in a region, it does not indicate how the price of milk has changed at your grocery store. So how can the HVI be of use to an individual investor? Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent big picture data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Valuation Trends and Predictions:

Cincinnati United States
Previous Year +4% (14 of 71) +1% (49 of 71)
Growth in 2017 +1% (45 of 71) +2% (36 of 71)
Growth in next 3 years +7% (52 of 71) +10% (36 of 71)

Change In Value For Market:

Cincinnati RevPAR % Change

For more information, please contact:

Stacey Nadolny, MAI
snadolny@hvs.com
  • +1 419 367-3879 (w)
Brian Arevalo
barevalo@hvs.com
  • +1 817 680-7666 (w)
J. Carter Allen, MAI
callen@hvs.com
  • +1 713 252-5995 (w)