CoStar Group, the $22 billion giant most known for its data on office and retail properties, is making a big push into the hotel industry by acquiring one that industry’s largest research and analytics firms.
CoStar has agreed to acquire Tennessee-based STR in a $450 million all-cash deal that is expected to close in the fourth quarter, the companies announced Tuesday. The Wall Street Journal first reported the news.
“We’re trying to get really high-quality data for a $3 trillion asset class,” CoStar CEO Andrew Florance told the Journal, referring to the company’s estimate of the total value of the world’s hotels.
Confidential STR data on metrics such as room revenue and occupancy are used by hotel owners on a daily basis to compare their performance with competitors, as well as by investors to inform business decisions. The data currently covers more than 65,000 hotels in more than 180 countries.
The headquarters of STR, founded as Smith Travel Research in 1985, will remain in the Nashville suburb of Hendersonville, and STR president Amanda Hite will stay on in that role. The company began marketing itself for sale in August “to obtain capital for expansion and other purposes,” according to company executives.
CoStar’s sales force will be able to help STR expand its geographical reach, while STR’s expertise in providing benchmarking data may allow CoStar to offer similar tools for other commercial property types.
“There are 350,000 hotels outside of the U.S. that are targets that we could be going after,” STR’s Hite said.
In September 2018, The Real Deal published a deep dive on CoStar’s approach to competition, revealing how it has used extensive litigation and aggressive public relations strategies to maintain its place as the top commercial real estate data firm.