International law firm Berwin Leighton Paisner (BLP) predicts investment into the hotel sector will reach a peak in 2015. The forecast is based on its latest European Hotel Market Survey, which included responses from more than 300 hotel industry professionals.
The survey found that that 70% of respondents believe that hotels continue to outperform more traditional commercial property investments. A number of factors are thought to be behind this, including an increase in available capital and lending and investors diversifying.
Global transaction volumes have also reached levels not seen since before 2008. Fifty-five percent of respondents predict that Western Europe will benefit from the majority of global investment in 2015 due to the stable geopolitical environment it offers.
“Our survey reveals a strong and optimistic feeling around the hotel industry this year with investors being advised to capitalize on the current boom,” said BLP’s Karen Friebe, who unveiled the survey’s results at Berlin’s International Hotel Investment Forum. “It seems that the levels of activity and increased availability of debt and equity in the industry will be sustainable for at least the next 12 months.”
Friebe added that that confidence in continued growth was much lower with this year’s survey respondents compared to 2014, an indicator that the industry is closer to the top of the current cycle. “Hotels are still perceived by many as a risky asset class – meaning that the wider investment community could miss some attractive opportunities this year,” she said.