European cash will dominate this year
FEWER European hotels will change hands this year compared with a bumper 1998, and most of the money invested will come from inside Europe, says a new report.
Last year hotel deals in Europe added up to a total of £4.8b, according to the European Hotel Property Digest just released by property agent Jones Lang LaSalle. Money from US investors accounted for 26% of the market in 1998 while European investors made up 47%. But following turmoil in the US stock market in the late summer, activity by US investors has dried up.
As a result, the report concludes, European money will dominate the market in 1999. And it adds: "The successful launch of the euro is expected to increase this form of investment activity significantly."
Most of last year's transactions (51%) were in the UK, but 1998 also saw an all-time high in the German market where deals completed reached DM920m (£310m).
The report shows 1998 was a strong trading year for most major European cities. London had the highest room yield at just over £155, Amsterdam had the highest occupancy at 80.1%, and Barcelona had the strongest growth in room yield at 26.3%.
German cities have been the poorest performers over the decade. Berlin, where the number of hotel rooms outstrips demand, recorded the lowest room yield in 1998 at £44.96.
by David Shrimpton
