Euro hotel values grew over 9%.
Saturday, 24th March 2007
Source : HVS International
The survey shows that hotel values achieved a third consecutive year of growth, increasing by 9.4% in 2006, compared with an increase of 5.0% in 2005.

It is the first year since 2000 in which all of the 28 markets covered in the index experienced increases in value, reflecting the health of the industry throughout Europe. All bar eight markets have either reached their highest ever values or surpassed the peak values achieved in 2000. The top five most expensive European cities in which to buy a hotel remain in the same order for the third consecutive year.

Commenting on the results, survey co-author Dominique Bourdais, a director of HVS, noted that London has retained its position as the most expensive city in which to acquire a hotel.

"After breaking through the €500,000 barrier last year, the average value per room has increased to €576,700, a 12% growth over 2005's record values. Paris remains in second place," he noted.

"For the fourth time in the last five years, Moscow had the greatest percentage growth in value, at 21% in 2006, partially fuelled by the strong desire of developers and operators to enter the market," he added.

Survey co-author Elana Bader commented that the European average is boosted largely by the extraordinary growth in value by the top markets, including London, Paris, Milan, Zürich and Geneva, as well as the strengthening of values in the remaining cities.

"All but two of the 28 markets under review achieved value increases in excess of inflationary growth," she commented. "The average European values per hotel room in 2006 have subsequently reached the highest levels in history," she added.

The authors also noted that while debt markets remained competitive, investors have increased their typical geographic investment boundaries and pushed up activity in areas such as Eastern Europe over the last few years.

"The concern of increased availability of debt financing and resulting growth causing oversupply didn't quite pan out as had been thought in early 2006, but the same concern remains for the coming year as markets show no signs of decline," noted Dominique Bourdais.

"In 2007 we expect that a lot of the markets will continue the upward trend in hotel values for a further year, albeit perhaps not at the same growth rate as 2006 or 2005. Lending terms are at their most competitive which will limit further yield compression. Nevertheless, in view of recent performance, investors' appetite for the hospitality industry is likely to lower yields still further as many investors compete for each opportunity," he concluded.

The European HVI has tracked trends in hotel values in key regional markets since 1993. The survey covers upscale hotels in 28 gateway cities across the continent. Copies of the HVI 2007 report are available free of charge from HVS, 7-10 Chandos Street, Cavendish Square, London W1G 9DQ and its website: www.hvs.com
 Latest News  (Click title to read article)

 Latest Articles  (Click title to read)

 Most Read Articles  (Click title to read)

~ Important Notice ~
Articles appearing on 4Hoteliers contain copyright material. They are meant for your personal use and may not be reproduced or redistributed. While 4Hoteliers makes every effort to ensure accuracy, we can not be held responsible for the content nor the views expressed, which may not necessarily be those of either the original author or 4Hoteliers or its agents.
© Copyright 4Hoteliers 2001-2024 ~ unless stated otherwise, all rights reserved.
You can read more about 4Hoteliers and our company here
Use of this web site is subject to our
terms & conditions of service and privacy policy