EXPO REAL 2007 - Big changes in the European hotels market

6th Hospitality Industry Dialogue on 8 October 2007
• Investment hits new record
• Stronger focus on central and eastern Europe

2006 was a record year on the global hotels market. Around 72.5 billion US dollars were invested in hotels in the year – that´s 63 percent more than the year before. And the boom is continuing in 2007. Where developments are headed next will be analysed by experts at the 6th Hospitality Industry Dialogue to be held on 8 October 2007 at EXPO REAL 2007, when they explore the question of ‘Hotel investment worldwide – where is the capital going, and where is it coming from?’. Representatives of companies that are currently active on the European and global hotels market will be explaining why it´s the right time to invest in the German hotels market, what new investment vehicles there are, when we can expect the first hotels REIT and what effect this will have on the market for hotel investment.

Europe´s hotels market is in a state of flux. The reasons behind this are on the one hand a high demand on the part of investors for investment products, and on the other the wish of the larger hotel chains to continue managing their hotels as before, but to divest themselves of ownership of the actual properties. Accordingly most of the transactions were portfolio sales, by Accor, Marriott and InterContinental, for example. There is of course a natural limit to this development, and already the large chains now only own a few hotels, so portfolio transactions at least will decline in 2007.
The structure of the hotel owners has also changed radically – the purchasers were primarily private equity companies – they made up 43.8 percent of the buyers, followed by wealthy individuals (eleven percent) and property companies. According to estimates by Eurohypo, the influence of REITs on the hotel investment market will rise over the coming years in Europe, in a similar way to the developments in the US since the 1970s. A first hotel REIT is expected to be launched on the stock market in the UK this year.

The rise in investor interest in hotels is not only associated with the increase in investment capital and a lack of suitable investment property – it also has several other specific reasons related to the hotel and tourism sector. These are the fastest growing segments of the economy. In Europe in particular, which is the world´s largest hotels market (over five million rooms, compared to 4.5 million in the whole of North America), the number and range of hotels is once again expanding, for the first time in many years. This is true not only of the higher-class and luxury segment, but also, according to Eurohypo estimates, for the economy class (with two to three stars).

The western European capitals remain the preferred locations, but the hotel markets in central and eastern Europe are becoming ever more attractive as the risks are now sustainably reduced, particularly in the EU member-states, and the yields are continuing to be attractive. However, a clear shift in emphasis is being seen here – in 2005 it was on Russia and Turkey, but in 2006 it moved distinctly in favour of Poland, Bulgaria, the Slovak Republic and Serbia. With the exception of Prague and Budapest, tourist numbers in central and eastern Europe have risen strongly in the past two years, but on the other hand the rising prices for overnight stays have had a dampening effect on capacity utilisation in the hotels.

For a full conference programme for EXPO REAL go to:
www.exporeal.net

EXPO REAL
EXPO REAL, the 10th International Commercial Property Exposition, takes place from 8 to 10 October 2007 at the New Munich Trade Fair Centre. The event is an international platform for networking on projects, investment and finance. It covers the entire spectrum of the property sector and brings together players from all the key markets from Europe, to Russia, the Middle East and the US. An extensive conference programme, featuring around 400 speakers, provides an in-depth overview of current trends and innovations in property investment and finance. EXPO REAL 2006 attracted 1,638 exhibitors from 40 countries and 21,112 visitors from 65 countries. The statistics for EXPO REAL are independently audited on behalf of the Gesellschaft zur Freiwilligen Kontrolle von Messe- und Ausstellungszahlen (FKM), a society for the voluntary control of fair and exhibition statistics.

Messe München International (MMI) is one of the world´s leading trade-fair organisations. It organises around 40 trade fairs for capital and consumer goods, and new technology. Over 30,000 exhibitors from more than 100 countries, and over two million visitors from more than 200 countries take part each year in the trade fairs in Munich. In addition, MMI organises trade fairs in Asia, Russia, the Middle East and in South America. With four subsidiaries in Europe and Asia and 66 foreign representatives covering 89 countries, MMI has a truly global network.

Petra Gagel
Tel.: 49 89 / 9 49-20244, Fax: 49 89 / 9 49-20249
E-mail: petra.gagel@messe-muenchen.de
05e/ProKomGB1/pet

This release was published on openPR.