Investors give hotels less time

Equity firms have slashed the length of time they invest in hotel properties by up to half, a new study has found.

Research from hotel property agency Jones Lang LaSalle Hotels (JLL) found that the window for hotel investments, previously three to seven years, had shrunk to two to four years.

Arthur Adler, managing director of JLL, said: "This leaves hotel operators limited time to establish themselves and meet aggressive owner performance expectations."

The study found several factors had caused the shift. They included the increasing separation between management and ownership in the sector, the dominance of large private equity firms and their aggressive asset management skills, and the spread of diverse portfolios and Real Estate Investment Trusts.

Adler warned: "While operators have chosen an opportune time to free up capital, they may find that the new ownership regime is more demanding than they have anticipated."

By Emily Manson

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