Hotel values in Europe fell by 13.4% last year, taking the cumulative decline over the past two years to almost 25%, according to HVS, the hotel valuation consultants.
However, London bucked the trend by recording a 14% increase in 2009 in sterling terms to achieve an average value of £431,000 per room, having suffered a 11% fall the previous year.
The figures, which show that 2009 saw the lowest volume in European hotel transactions ever recorded, are outlined in the HVS European Hotel Valuation Index, which tracks four- and five-star hotel values in 36 markets.
London was second in the valuation league table last year behind Paris, which despite a 4% decrease still recorded the highest value per room for the second year running at £485,000.
"Provided hoteliers can manage the transition back to a more balanced revenue stream as corporate demand recovers, they should be well placed to enjoy revPAR and value growth in 2010," said Tim Smith, co-author and HVS director.
"Part of the popularity of the UK, and London in particular, as a place to buy hotels is down to the cheapness of sterling against major currencies like the euro. But a significant factor has also been the flight to less volatile markets by international investors.
"In 2010, providing that debt financing loosens up, it is likely that transactions volumes will pick up and allow investors to seize the opportunities at significantly reduced prices."
By Janet Harmer
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