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Hotel sector in 2016 faces ongoing investor demand and threat of terrorism

08 January 2016 by
Hotel sector in 2016 faces ongoing investor demand and threat of terrorism

The European hotel sector is facing a challenging 2016 as investors are prompted to sell their assets ahead of the usual time-frame thanks to strong demand for hotel acquisitions, especially in London.

That's according to a new report from global hotel consultancy HVS, which also highlighted the continued consolidation of branded hotel chains and the impact of recent terrorist activities as key issues facing the industry.

The sector would also see significant restructuring in the year ahead, as the market consolidates, the report said.

However, the European hotel sector will also be affected by the terrorist atrocities in Tunisia, Egypt, Paris and elsewhere, which HVS expects to influence potential travellers, especially leisure visitors, for "some time to come".

HVS London chairman Russell Kett commented on the growing desire for investors to sell hotels they have only recently acquired, well before the usual five- to seven-year time normally sought. "The trend towards early checkout will continue as long as there is a queue of investors still seeking to acquire hotels and portfolios," he said, pointing to last year's sale of Malmaison and Hotel du Vin by KSL Capital Partners to Singapore-based Frasers Hospitality after only two years as an example of the trend.

He added: "This activity fuels further interest in the sector, providing opportunities for other buyers to enter the market. It is also an indication that owners are starting to feel we are approaching the peak of the property cycle, although this could remain the case for some time, conceivably through 2016 and even 2017."

Mixed year ahead for hotels, says HVS London >>

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