Tourism recovery contributes to hotel investment growth

28.10.2013

The tourism has undergone a serious expansion and diversification over the last six decades and it has turned to one of the largest and the most rapid growing economic sectors in the world.

A number of new tempting touristic destinations have appeared and they are considered a serious challenge for the typical centers in Europe and in North America, a report of BNP Pariba Real Estate, quoted by the online edition of property-magazine.eu, informs.
Despite all the challenges in front of the economy, the World Tourism Organization (UN) expects a global tourists’ visit growth of 3-4% and a growth of 2-3% in Europe.
With regard to the optimistic prognosis, the five most popular tourism destinations in Europe indicate serious hotel investment growth – over € 4,5 billion during the first half-year only which is 54% more compared to the same period last year.

As with the other types of real estate, the hotel investors are also focused on the first-class assets. The hotel market has two aspects – the high-quality hotels in the leading attractive tourism centers generate huge interest while the not so well performing hotels in the secondary destinations do not manage to find any buyers.

The investments’ volume in France has reached € 1,3 billion within the period between January and June that amounts to 119% compared to the same period last year. The growth is mainly due to the deals with trophy assets such as Mandarin Oriental and the portfolio of Concorde Luxury Hotels. Dominating players on the market in Paris are the state investment funds.

Great Britain keeps dominating on the investment market in the hotel segment. The state has attracted € 1,9 billion during the first half-year which amounts to a growth of 23% compared to the same period last year. The investments in the segment are concentrated in London that is considered a secure and attractive tourism destination.

Italy keeps accounting of an investment slump in the segment but several trophy sales have been completed during the summer after the end of the half-year, which would probably lead to positive data until the end of the year.
A hotel investment growth of 121% is registered in Germany during the first six months of the year and it has reached the total volume of € 800 million, company data show. However, the increase is defined according to the sales of Queens Moat House’s portfolio.
The deals in Spain account of a good end of the year – the hotel segment is expected to get out of the negative coil and the hotels are supposed to improve their operative results.

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