Hotel investors turn to Europe

Hotel investors shied away from the UK last year and instead turned their attention to securing deals in Continental Europe.

A study, by investment group Jones Lang LaSalle Hotels, found they spent £1.4b on buying hotels in Europe, approximately 20% more than they did in 1999.

The study, entitled: Digest Europe, revealed more than £1b was spent on such deals in Continental Europe alone. This figure was 96% higher than that recorded in 1999.

Across the UK, however, the volume of hotel investment fell by 44.1% in 2000 to £360m. London, down 53%, was the worst-hit area.

Arthur de Haast, managing director of Europe at Jones Lang LaSalle, said the decline was due to the dearth of quality hotels on the market.

He said: "Given the improvement in the London operating market in 2000 there was a hold sentiment, with owners disinclined to sell."

He added: "Investor demand remains strong for quality assets in the London market."

The report also found that while hotels in most European cities recorded healthy increases in bedroom yield last year, this was not the case in Warsaw in Poland, Budapest in Hungary, Cardiff, Birmingham and Edinburgh.

In these cities bedroom yield was lower last year than it was in 1999 because of an increase in the number of hotel bedrooms.

In Prague, the best performing city, the average bedroom yield increased by 28% to £55.

After a slight dip in 1999, Amsterdam recorded an average occupancy of 82.6%, the highest in Europe and a 23.3% increase in bedroom yield.

London boasted the highest room rate and bedroom yield in Europe at £212 and £171 respectively.

For a copy of the report contact: 0207 399 5616.