Huntington Beach is one of Orange County, CA’s seaside cities. According to the 2010 U.S. Census, it had a population of 189,992 at that time, which means it is the most popular beach city in the county, as well as the seventh in the Los Angeles-Long Beach-Anaheim area. The population is also growing, with an estimated 200,809 people living there in 2014. It also has a 9.5 mile stretch of beautiful, sandy beach and is perfect for the surfing and beach community. In fact, it is affectionately known as “Surf City” and attracts surfers from all over the world.
Huntington Beach Hotel & Motel Property for Sale & Lease – Should You Buy or Lease?
There are pros and cons to both leasing and buying hotels and motels. As an investment, whether you purchase or lease the property, and whether you look into an entire hotel or motel or a single room only, the advantages include:
- A low requirement for capital investment (if you purchase a single room), while ensuring a high return, particularly if you invest in a hotel room in Huntington Beach, where demand is high.
- The option of having a fixed rate of return, which is available for both buyers and lessees, without having to take on any of the risks of hotel management. This means that if there are customer complaints or breakages, the responsibility lies with the hotel manager.
- Having a steady return available to you, particularly in Huntington Beach, with high average daily rates.
- Being able to use the hotel or room for your own personal use as well, although this means that you will not earn an income at that time.
Essentially, hotel & motel properties offer investors a profitable, low risk method of having a diverse investment portfolio.
However, downsides exist with investing in hotel & motel property as well:
- Filing tax returns can be incredibly complex in terms of jurisdiction and taxes.
- Not having an influence on the marketing policy of the hotel, or of its management strategy, unless you purchase the entire operation.
- It requires you to have a good foundation about the hotel industry in order to ensure that you are doing things right.
- That there is some seasonality involved in hotels, which means you won’t always have a good or predictable month per month income.
- Competition to make a single room purchase in particular is incredibly high, including with foreign investors vying for any room that becomes available.
To help choose between the two options, being aware of the trends and statistics in terms of prices, supply, and demand, is advisable.
Huntington Beach Hotel & Motel Property for Sale – Trends and Statistics
- Huntington Beach, like in the rest of Orange County, has seen very strong occupancy rates for their hotel & motel properties. It is believed that the increase in RevPAR (revenue per available room) was driven mainly by the great improvements in the ADR (available daily rates). Since 2013, hoteliers have been able to see a strong regain in their pricing power.
- The overall ADR across Orange County increased by 5.7%, reaching $159. The average occupancy also increased to 76.6%, which was a 2.5% increase. Additionally, it is anticipated that this growth will continue, and that it will hence also continue to increase the RevPAR.
- More specifically to Huntington Beach, the greatest development was the 157 room Shorebreak, which is found at the Strand. DiamondRock acquired this on behalf of Kimpton Hotels & Restaurants. Furthermore, the Huntington Beach Hilton saw an expansion of $140 million, when a new tower was added. Also, the Pasea Hotel has been under construction, and other hotels in the area have gone through major renovations. This is all indicative of a strong market for the hotelier business.
- Hotel occupancy rates have continued to soar, and this has increased room rates significantly as well. Some 3.5 million visitors come to Huntington Beach every year. As a result, occupancy rates in this city currently stand at 83%. The average price for a hotel room is $249 per night. These were the recorded rates in 2014, which also represented a very significant increase from the previous year, when occupancy rates were 77%, and average room prices were $230 per night.
Huntington Beach Hotel & Motel Property for Lease – Trends and Statistics
There are currently no hotel & motel properties for lease in Huntington Beach. These buildings tend to be owned through mortgage or outright purchase. However, as the statistics above have demonstrated, deciding to invest in hotel & motel properties is a very good financial decision because of their high yields and low risks. The hospitality industry as a whole in Huntington Beach is incredibly strong and certainly one to build on.