United States -  Rochester

Overview:

Rochester is the third-largest city by population in the state of New York and is known as the "Imaging Center of the World" due to its status as the home of both Eastman Kodak and Xerox. Apart from imaging technology, other important sectors in the region include food and beverage manufacturing, health care, green technology, optics, and biotechnology.
 
Hotel market conditions in this region have been consistently imbalanced; occupancy has not surpassed the 60% threshold since 2007 and is not expected to do so in the near future. Average rate growth has been at or below inflation in recent years. Despite the weak metrics, there have been increases in inventory, including a 107-room Hilton Garden Inn that opened downtown in March 2015, and a 136-room Hilton Garden Inn that opened in June 2015 near the University of Rochester. In addition, the Rochester Plaza Hotel & Conference Center was recently renovated and converted to a Holiday Inn affiliate; in the process, the room count was reduced from 362 to 217.
 
Prospects for hotel values in the Rochester area are, at best, weak. The recent sale of the Hyatt Regency for $48,000 per room is representative. This followed the February 2015 sale of the Marriott Airport for $24,000 per room. Rather than attracting institutional investment, the market is chiefly the province of opportunistic buyers seeking to acquire existing hotels at steep discounts to replacement cost, and regional entrepreneurial investors able to identify rare sites in the region where modern limited-service products can attract a viable amount of demand away from dated hotels with inferior brands.
 
* 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:

Rochester United States
Previous Year +1% (41 of 71) +1% (49 of 71)
Growth in 2017 +2% (29 of 71) +2% (36 of 71)
Growth in next 3 years +11% (32 of 71) +10% (36 of 71)

Change In Value For Market:

Rochester RevPAR % Change

For more information, please contact:

Erich Baum, CRE
EBaum@hvs.com
  • +1 603 502-6625 (m)