The International Hotel Investment Forum in Berlin is less than a month away, and for perspective on the global hotel industry, we reached out directly to attendees. While there are certainly headwinds—strife in Russia, a weakened euro, fragility in Greece, to name just a few—overall, delegates are generally optimistic over the future prospects of the hotel industry in terms of transaction volumes, overall performance and access to debt.
Hotel Management's pre-show survey posed a range of questions to delegates. Here's some of what they had to say, and look for more in the February IHIF issue of Hotel Management magazine.
On Transactions Market...
Bettina Bülte, manager at PwC: "In terms of transaction activity, we would expect a good year as financing is readily available and investor appetite is still strong."
Karl Bieberach, VP of feasibility and investment analysis for Starwood Hotels & Resorts Worldwide: "Globally, transactions will be stable to increasing in 2015 but mostly due to tailwind from 2014. Hotel development will be stable first part of the year, but declining in latter part of the year. The peak has passed."
Ascan Kokai, director, fund management, hotels for Invesco Real Estate: "In light of strong travel and tourism fundamentals, there will be some growth in performance [in 2015]. Transaction activity, helped by low interest rates and limited returns in other asset classes, is likely to be strong again while development will stay moderate."
Nick Smart, VP of development N&W Europe, Hilton Worldwide: "Trading Performance will be on a par with 2014. Development activity for conversions will increase as the PE companies work through the portfolios they have acquired, particularly in UK. Expect to see the start of rebound on Iberian Peninsula. Interest in new-build projects is back as there are much fewer opportunities to acquire hotel assets at less than replacement cost."
Benjamin Ploppa, real estate transaction manager, BNP Paribas REIM Germany: "Southern Europe and the Euro area remain challenged and there are mixed messages coming from the emerging markets. New entrants like Airbnb or Wimdu are influencing the guests demand structure. However the appetite of investors is likely to remain strong also because of low interest rates and favorable financing conditions. PE investors are more flexible, while institutional investors are focused in gateway cities. Investment in trophy assets mainly by HNWIs.
On Economic/Political Environment...
Jean-Jacques Vallet, CEO, Constance Hotels & Resorts: "The outlook for 2015 should be better than 2014. However, the geopolitical uncertainty is a risk which must not be underestimated. It could have a negative impact."
Tea Ros, managing director at Strategic Hotel Consulting: "Although hotel market statistics are indicating toward a positive year of growth, the underlying economic challenges could make it a bumpy ride for some."
Lionel Benjamin, director of hotels for Topland: "As long as political stability in Europe is maintained, travel will grow and hospitality will reap the benefit."
James Devitt, MD, Herald Hotels: "Most hotels trade predominantly with euro-denominated customers and will not be seriously impacted by exchange rate movements except in key global cities, where hoteliers will have to be alive to the need to switch their source market focus with this trend in mind."
Gesa Rohwedder, head of hospitality for Drees & Sommer: "It will certainly impact the travel behavior of guests, with opportunities to travel across European countries."
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