E&Y: Prospects Bright for Lodging Market

Thanks in part to high levels of CMBS-related capital flow, the prospects are bright for the U.S. lodging market this year, according to the 2006 U.S. Lodging Report by Ernst & Young LLP.Other positive factors are solid fundamentals and the opening of more foreign markets, the company reported. "Last year we saw a doubling of financing activity for hotel real estate in the commercial mortgage-backed securities sector, and we see another strong year ahead," said Michael Fishbin, national director of hospitality services at Ernst & Young Transaction Advisory Services. "Given the fact that the lodging sector is clearly an asset class of choice -- as evidenced by the huge flows of capital into the sector and cap rate compression we saw in 2005 -- we expect investor appetite for hotel deals to grow in 2006, especially in major markets where room rates have shown strength and occupancy rates have improved." Ernst & Young can be found online at http://www.ey.com.