- What regions or markets will offer the best investment opportunities in 2020?
The challenge with European hotel investment is that you aren’t always able to find hotels to buy in the markets you want. Due to the lack of hotels for sale and the lack of new supply, it is often difficult to find hotels in London or Paris for example if these are the markets one is focused on. While we prefer to invest in the major gateway cities of Western European countries and those are the markets that we believe will have the best upside, we will also invest in resorts and in Central and Eastern European markets. The most important thing for us is the property we are buying and the opportunity it provides as opposed to investing in a specific country.
- What are your observations on the types of owners currently investing in hotels? Where are they originating from? What objectives do they have?
Today, we are seeing a lot of private equity funds and institutional investors. We are also seeing a large number of HNW investors, although those investors tend to focus on luxury hotels and hotels that are located in the major gateway markets. The investors are very international, with the majority coming from Asia, North America and the Middle East. I should also note that a fair number of European institutions have been active and they have been buyers of some of the largest portfolios that traded last year.
As you would expect, different types of investors have different return requirements. While all of them are looking for good returns, HNW investors tend to be focused on capital appreciation, while the institutions are looking more for annual yields as opposed to large capital gains.
- What do you think will be the biggest challenge for the hospitality industry in 2020?
While economic uncertainty may be one common thread across the various markets, the issue facing Paris are very different than those facing Lisbon. It is important to note that while Europe is one continent, the challenges of the hospitality industry varies from country to country.
- If you could change one thing about the hospitality industry, what would it be?
Reducing the turnover rate of employment at hotels. We are in a great industry and we need to find a better way of motivating and keeping staff with us for a longer period of time.
- Finally, when we have Skype, FaceTime, video conference calling and everything in between, why is it still important and relevant for people to gather together at events such as IHIF?
Technology is making easier and cheaper for everyone to stay in touch. There is still however nothing as effective as meeting someone in person. Technology will help in building a relationship, but there is no substitute for a face to face meeting.
Ramsey will participate in “Investor Panel: Playing the Long Game” on the opening day of IHIF 2020, Monday 2 March. In this session, investors anticipate future market trends and evaluate new risks to plan their longer-term strategies? The investor panel will look at the biggest trends affecting the business of hotel investment, including sustainable investment, sustainable operations, the risks of climate change, geopolitical disruption, regulatory changes and industry disruption
For further information on this session and IHIF in general, please visit www.ihif.com