More money spent on buying hotels in Europe than in the U.S

August 17, 2010 at 5:33 pm Leave a comment

Real-estate investors will spend more money buying hotels in Europe than the U.S. this year. Hotel acquisitions in Europe are reported to reach $5.5 billion in 2010. Blomberg.net reports that this is a larger sum than the one spent in the Americas, a total of $4.5 billion.

This increase is due to the slower development that helps preserve property values in Europe. Also, occupancy and room rates have increased at a faster pace in Europe than in the Americas. 90% of all hotel investments in the Americas are in the United States.

In Europe, the hotel construction pipeline included 587 properties comprising 100,013 rooms, according to the December 2009 STR Global Construction Pipeline Report. That compares with plans to build 3,829 hotels in the U.S. with 401,090 rooms.

Occupancy in Europe climbed to 61 percent from 58 percent, while it increased in the U.S. to 56 percent from 54 percent, according to Tennessee-based lodging industry research firm Smith Travel Research Inc. Daily rates in the U.S. fell 2 percent to $97.18. In Europe, they rose 1.9 percent to 97 euros.

The European assets retain a very high value as the European markets have a high barrier of entry, which limits future supply growth.

According to experts in the field, the European market didn’t decline quite as much in 2008 and 2009 and remained more liquid than the U.S market.

Source: bloomberg.net

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Entry filed under: Hotels, News, Real estate. Tags: , , , , , , , , , , .

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