National Report – Who says all hotels are useless after they hit their 40th birthday? Not PKF Hospitality Research. The research firm looked into the performance and operating expense differences between grande dame hotels and their younger, more contemporary counterparts. PKF analyzed the performance of a set of historic hotels built before 1960 against a similar set of luxury and upper-upscale properties built since 1960.
Turns out age really does bring advantage. The historic hotels pulled down higher occupancy and average daily rate premiums than the contemporary set. Also, the historic properties had a better rate of recovery post-recession: By 2012, total revenues had recovered to pre-recession levels while the contemporary properties’ 2012 total revenues still hovered 7.4 percent below 2007 levels.
The historic properties lost ground on operating expenses and bottom-line revenue contribution. The maintenance costs associated with older buildings takes a toll, and historic hotels often need more staff to make up for a lack of modern building conveniences.