EMEA, Feb. 24, 2021– Uncertainty and caution plagued hotel investor interest in 2020 due to the COVID-19 pandemic, however, the global lodging industry is poised to rebound in 2021. According to JLL Hotels & Hospitality’s annual Hotel Investment Outlook [1], the industry’s resilience shaped new experiences and demand from consumers while introducing a wave of trends that have been accelerated as hoteliers quickly shifted operations and strategy.
The Global & EMEA Outlook
Global hotel liquidity was down more than 60% from 2019 levels, with nearly 50% of all transactions closing within the first three months of the year. Although challenging to navigate through a zero cash-flow environment, lenders were accommodating by granting forbearance agreements where possible. This was particularly pronounced in the UK where the government announced an extension of rent protection until March 31, 2021. However, pent up demand for a return to travel should lead to a bounce back in demand once restrictions are lifted across Europe.
Private equity groups and institutional investors capitalised on assets that were made available for sale and drove liquidity in 2020 by accounting for 54% of total volume in the year. Approximately 21% of global hotel investments were in resort markets, signaling the current investment appeal of less dense markets. This niche group of investor interest is expected to be a catalyst in driving hotel investment volume upwards of 35-40% from 2020 levels.
The pandemic will undoubtedly have long-term implications on the industry, over the short-term the following are trends to keep top-of-mind:
William Duffey, Head of Capital Markets, Hotels and Hospitality, Europe, JLL, said: “It’s been a difficult year for the sector due to the pandemic and subsequent lockdowns across Europe. In order for hotel assets to make the comeback that we believe it will, they must remain agile and adopt these changes as the industry continues to be tested in ways it never has. There’s no doubt that the road to recovery will be long, but there is optimism that pent-up demand to reexperience the world will gradually boost hotel performance across European markets.”
JLL’s Hotels & Hospitality Group has completed more transactions than any other hotels and hospitality real estate advisor over the last five years, totaling $83 billion worldwide, and across EMEA, JLL advised on €13.4 billion of hotel sales over the same period. JLL’s hotel valuation, brokerage, asset management and consultancy services have helped more hotel investors, owners and operators achieve high returns on their assets than any other real estate advisor in the world.
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[1] https://indd.adobe.com/view/9a85f47d-ace4-4144-a84a-763014dab619
[2] https://www.us.jll.com/en/newsroom