United States -  Savannah

Overview:

Savannah benefits from a diverse economic base. Tourism remains a primary industry for the Savannah market, with over six million visitors per year generating roughly $2 billion in revenue annually. In 2013, Condé Nast Traveler named the city as one of the top ten travel destinations in the U.S. Savannah's economy is also well supported by the aerospace and manufacturing industries. The largest employer in the area is Gulfstream Aerospace Corporation, which manufactures the world's most technically advanced business aircrafts. In late 2010, the company announced a $500-million, seven-year expansion project. Furthermore, Gulfstream also announced its Project X, which consists of two new super jets that will cost $43 million for the new G500 and $54 million for the G600. The company already has orders for the planes, with delivery set for 2018 and 2019, respectively. Other major manufacturers include International Paper, JCB, Imperial Sugar, and Mitsubishi Power Systems Americas, Inc. The distribution sector is strengthening; the Port of Savannah is the fastest-growing port in the nation. Furthermore, the healthcare sector is a vital component of the area's economy, including entities such as Memorial Health University Medical Center and St. Joseph's/Candler Health System, as well as two major cancer centers. Additionally, the military and education sectors represent important economic anchors. Fort Stewart reports an annual economic impact of approximately $1.4 billion on the Savannah area and, together with Hunter Army Airfield, employs over 24,000 military personnel. Moreover, 19 colleges and universities are present in the city, including The Savannah College of Art and Design (SCAD) and Mercer University.

Savannah has become a popular destination for boutique hotels. Since 2010, a number of luxury and boutique properties, including two Autograph Collection hotels, the Andaz Savannah, The Cotton Sail Hotel, and B Historic District, have opened in Downtown Savannah. Many of the new hotels represent the renovation and conversion of older, dated hotels. An example of this is Kimpton’s The Brice, which opened in May 2014. The historic hotel was the former Mulberry Inn, which closed in 2013. New boutique properties continue to break ground, as well. In June 2016, construction started on a 173-room boutique hotel on Savannah’s riverfront. We anticipate rate to continue to increase with the addition of these higher-rated hotels; however, we expect supply to outpace demand in 2018.

Since January 2012, Savannah has experienced a significant increase in the transaction prices in the Downtown and Midtown markets. The sale of the Bohemian Hotel Savannah Riverfront in late 2012 for a price of nearly $675,000 per key was the highest recorded in Savannah’s history. Large transactions in 2015 included the Courtyard by Marriott Savannah Downtown Historic District for a price of nearly $280,000 per key, and the Holiday Inn Savannah Historic District for a price of $220,000 per key.

* 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:

Savannah United States
Previous Year +0% (52 of 71) +1% (49 of 71)
Growth in 2017 +1% (39 of 71) +2% (36 of 71)
Growth in next 4 years -100% (71 of 71) +12% (32 of 71)

Change In Value For Market:

Savannah RevPar % Change

For more information, please contact:

Heidi Nielsen
hnielsen@hvs.com
  • +1 843 847-1986 (w)