You may want to invest in hotels developed by Springwood Hospitality LLC. Our hotels are funded privately through the direct investment of ownership interests.
These interests are privately placed at no charge to the partnership. Whether your goals are tax-advantaged cash flow, equity appreciation, or simply to diversify and position your investment portfolio with a hedge against inflation, these investments may be a great fit for you. What other investment can you have fun visiting while you enjoy a substantial Owners' Discount? We want you to have fun with your investment!
We periodically offer opportunities that may be of interest to you. The partnerships we sponsor are exclusively private offerings. Please be aware that these products are suitable only for high net worth investors and they fulfill specific investment goals. If we don't have your contact information on file, we are not permitted to tell you about our next opportunity. Click here to learn about our next offering when it becomes available. Your information will not be shared with anyone outside the Springwood Family without your written permission.
Tax-Advantaged Cash Flow
Real estate depreciation provides the investor an opportunity to enjoy tax-deferred cash flow, with no income tax at all payable on your money for the first several years from the inception of a new hotel development. We plan our depreciation schedules to shelter just enough income so that your investment cash flow is completely tax sheltered for the first several years of operations of your new hotel.
As with any tax-deferral, income tax is eventually payable on the sheltered income, but deferring that tax for many years provides you with significant investment benefits.
Hedged Against Inflation
When the economy recovers from recession, price inflation can accelerate. Over the last two decades, hotels have been an effective hedge against inflation.
"Over the past 20 years, the average annual rate of inflation for the United States has been roughly 3.1 percent. Over the same time period, the average annual nominal growth rate of ADR has been around 3.5 percent. By factoring inflation into the ADR equation, the real growth rate in ADR over the past 20 years in the lodging industry has been approximately 0.4 percent." This ADR growth rate was observed in research published in November, 2008 by Chad Church, Manager of Industry Research for Smith Travel Research, an industry-leading research firm. Average Daily Rate (ADR) is the standard measure of hotel room pricing.
David Lesser, in a May, 2008 article on GlobeSt.com predicted, "During the next several years, the national occupancy level is anticipated to remain relatively flat … Average room rates are expected to continue to grow above the nation's underlying inflation rate. This resultant combination suggests real RevPAR increases." RevPAR means "revenue per available room", an inflation measure that factors in both ADR and occupancy.
When occupancy is flat, and ADR and operating expenses both grow as fast as the economy's general inflation rate, if margins are constant, net operating cash flow grows at a rate equal to inflation. When operating cash flow on a leveraged property grows, net distributable income grows at a higher rate, due to leverage.
It is always possible that operating costs could rise faster than either the underlying inflation rate or the ADR inflation rate. In this case, margins would deteriorate and the hotel investment would not keep pace with inflation. Past history is never a guarantee of future performance.
