Strong performance levels in the form of rising occupancy and achieved average room rates (ARR), which led to increasing revenue and Ebitda;
- Declining performance levels driven primarily by a softening in demand for transient accommodation, which has a downward impact on revenue and Ebitda;
- A return to stringent lending conditions whereby lenders, compelled to deleverage, are tightening their criteria, forcing investors to reduce their LVR and placing a renewed emphasis on interest coverage ratio; and
- Subdued sentiment towards the sector as investors shy away from the perceived risks associated with the industry.
This has a significant impact, not only on asset values, but also on hotel transactions. From the 'dizzying' heights of 2006 and 2007 when well in excess of A$1 billion worth of hotel assets was transacted each year, only A$750 million worth of major hotel assets was transacted in 2008. And 20 per cent of that total was derived from the A$160 million sale of the Westin Hotel in December 2008.