United States -  Sacramento

Overview:

The greater Sacramento hotel market comprises Yolo, Sacramento, El Dorado, and Placer Counties. Both occupancy and average rate have increased since 2011. Driven by government-related business, a strong technology sector, and increased residential construction, average rate growth in Sacramento has accelerated over the last few years. After several years without new hotel supply, a number of proposed hotel projects are being pursued in the market, including a full-service property that is part of the larger public/private mixed-use development of a new Sacramento King’s Arena in Downtown Sacramento.

Transaction activity has been limited in the greater Sacramento area in recent years, primarily consisting of hotels in the select- and limited-service sectors. Fewer than 15 hotels have sold within the city of Sacramento since 2012. The outlook for the Sacramento market is positive as economic conditions continue to improve and demand levels remain strong. The entrance of new full-service hotel supply should bode well for this market, as well. Thus, the value of Sacramento hotels is expected to appreciate over the next two years.

* 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:

Sacramento United States
Previous Year +6% (8 of 71) +1% (49 of 71)
Growth in 2017 +1% (48 of 71) +2% (36 of 71)
Growth in next 3 years +16% (3 of 71) +10% (36 of 71)

Change In Value For Market:

Sacramento RevPar % Change

For more information, please contact:

Suzanne Mellen, MAI, CRE, FRICS, ISHC
smellen@hvs.com
  • +1 415 268-0351 (w)
  • +1 415 896-0868 (w)
Adam Lair, MAI
alair@hvs.com
  • +1 415 896-0868 (w)
  • +1 504 231-2651 (m)
Desiree Flanary, MAI
dflanary@hvs.com
  • +1 970 381-9794 (w)