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2012 May be the Year of Slow Growth for European Hotels

News The results of the European hotel survey conducted by DLA Piper show that as many as 84% of respondents do not foresee any growth for European hospitality market, or this growth may be very small.

Over-valued prices and problems with gathering enough finances are called among the most important reasons for slow growth. Approximately 12% of the respondents think the industry is well prepared and is currently able to resist the problems of the downturn in the region.

The lack of funds in the industry makes investors selecting asset light strategies. In 2012 the increase of joint ventures will estimate 55%. Leasing and franchising will also become more widespread. This year may be the year of individual investors; private equity funds will have a share of approximately 23%, and wealth funds – of 19%. The origin of investors will be the following: more than a half of respondents (64%) think the majority of buyers will come from the Middle East and investors from BRICS countries (Brazil, Russia, India, China, South Africa) will be the second largest group.

What parts of Europe will be the most popular for investors? Surprisingly, the respondents are very optimistic about the countries with unstable economic position – Portugal, Spain, Italy, Ireland, and Greece. At the same time, only 8% say they plan to invest in Greece. Spain is the most popular choice of investors – over 26% of people have chosen this destination. The UK is also a very popular choice for investments outside the Eurozone.

25.03.2012

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