| The number of hotels bought in San Diego County has | | | | there is a decline in the total dollar volume of |
| slumped almost 50% in the first six months of 2007, | | | | transactions the median price per room is rising; up 16 |
| compared to the same time period in 2006, according | | | | per cent in Northern California, with Southern California |
| to Irvine brokerage Atlas Hospitality Group. | | | | racing ahead at 33%. |
| The Group's mid-year survey of hotel sales has | | | | Report author Reay said: "We anticipate that sales will |
| highlighted several reasons for the decline, not least the | | | | continue to slow through the second half of 2007 as |
| reluctance of lenders to advance high-risk loans | | | | the lending markets tighten. Lenders are increasing their |
| following the collapse of the sub-prime market. Other | | | | margins on loans and have become more selective on |
| reasons for falling sales include the rise in popularity of | | | | the deals they choose to finance, concentrating most |
| smaller local hotels, and the fact that most of the | | | | on hotels that have already proven performance |
| available space on new developments for major | | | | rather than look at un-tried and un-tested projections." |
| hotels has already been acquired. The market is also | | | | Of course, the report was produced before the recent |
| renowned for its high entry barriers and many | | | | wildfires wreaked their devastation throughout the |
| would-be entrepreneurs or those seeking to increase | | | | county and whether the rebuilding projects will impact |
| portfolios are baulking at the increased risk in an | | | | on that market or even reverse the trend it is yet to |
| increasingly uncertain financial market. | | | | be seen. It could be that in the short term the |
| The report shows that between January and June | | | | destruction of some of the county's hotels means that |
| 2007 nine inns were sold for a total of $32.7 million. | | | | demand has to be filled somewhere, and could push |
| However, in the previous year the figures were 18 inns | | | | sales and prices back up. |
| for $60.57 million, but as the report's author Alan Reay | | | | Prior to the wildfires it may have been a bad time to |
| was quick to highlight, some of this year's sales were | | | | sell and anyone in the market to buy a hotel in San |
| package deals so the individual prices of each | | | | Diego county would have been able to negotiate a |
| establishment couldn't be ascertained. | | | | great deal. However, that may just have changed as a |
| The drop in total sales in San Diego County reflects | | | | result of the destruction to some of the county's |
| the trend happening throughout the State. But, although | | | | hotels. |