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The Volume of Transactions of Hotels in Europe Increased in 2011

The annual European Hotel Transactions Report provided by HVS London contains the consolidated information about all hotels in Europe and their transactions in 2011. Judging from the report it’s clear that the total volume of transactions in 2011 added 9% and reached US$9.5 billion (over 7 million of Euro). Such growth appeared despite economic uncertainty during the previous year and problems with debt funding.

In 2011 264 hotels throughout Europe were involved in transactions. The total number of guestrooms of all hotels estimates 43,200. Investors were interested in both leisure and business accommodations. Moreover, in 2011 were opened several previously closed or abandoned hotels. However, 2011 was by far not a peak year for hotel transactions. The record of 2006 is still unbreakable – that year the total volume of transactions estimated €20 billion (US$26.8 billion). The average figure for the latest decade (starting from 2002) is also a bit higher - €9.9 billion (US$13.3 billion).

More than a half of transactions (54%) concerned one hotel deals. The majority of buyers (72%) already have hotel portfolios. Among these investors are hotel chains, famous hotel operators or real estate investors. When it comes to rates, the situation is worse than in 2010 and the global crisis of Eurozone is one of key reasons for this. In 2011 the average price of one guestroom fell down by 27% and estimated €190,000 (US$254,415). 2012 is not likely to bring in any radical changes. Even though the total number of transactions is likely to grow due to a large number of abandoned properties, the markets needs more time for rates and demand to return to pre-recession levels.

16.03.2012

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