Enquête 2020 sur l'industrie hôtelière Européenne

Hotel industry sentiment

Top priorities

Stakeholder relationships and workforce health and safety have seen a drop since the last survey in July 2020 as businesses are now better prepared. The significance of remote working capabilities and transaction or expansions have also increased since the last survey in light of the second wave of the virus.

Investment opportunities

Assets with a focus on sharing experiences such as co-working, co-living, student housing and hostels have seen a decline in investment appeal, a total decline of 25 percentage points from the previous year. Hostels for instance plunged from 17% to just 1% as an attractive asset from the previous year. Holiday parks on the other hand climbed from 1% to 8%, possibly driven by the growth in domestic travel.

Serviced apartments have overtaken hotels to become the most attractive asset class to invest in Europe for 2021, driven by positive demand fundamentals and leaner costs. While appeal for hotels has declined, respondents believe they will have an attractive yield and more positive demand fundamentals than the wider asset classes listed. 

Risks

Protectionism, otherwise known as closed borders, as a risk for the hotel industry has seen a significant jump of 9 percentage points compared to the previous year in Europe. While being positioned in the middle of the list, climate change risks has seen a 3 percentage point growth compared to the previous year for the European hotel industry. Only 7% of European respondents 7% considered the weakening of the currency a risk.

Distressed activity

Disruption and recovery 

Focus on Europe

Top 10 European cities for investment

Amsterdam remains on top for the fifth year in a row as the most attractive European city for hotel investment in 2021, London reclaims its position pushing Paris into 3rd place. Berlin leaps ahead to 4th place from 16th in the previous year, pushing Lisbon down by one spot to 5th place. Barcelona holds on to 6th position, while Madrid slips down five spots to 10th place.

Financing the European hotel market

Private Equity investment remains the preferred source of equity capital for hotel acquisitions in Europe, with respondent sentiment almost doubling, an increase of 22 percentage points versus the previous year. Demand from Institutional investors and REITs is predicted to soften in 2021, down by 9 percentage points and 10 percentage points respectively from the previous year. Senior bank lending is expected to remain the most common source of debt financing, followed by REIT and distressed debt funds.

• Almost two-thirds of the respondents (59%) expect hotel investment to come from domestic sources within the EU. Increased activity is expected from the UK (30% up from 17%) and North America (50% up from 38%). Less than a quarter expect hotel investment to be sourced from the APAC and MENA regions.
• Two-thirds of the respondents view senior bank loans as the most common source of debt financing (dropping to 66% from 90% in the previous year) in the European hotel market; followed by REIT (40% down from 52%) and distressed debt funds 36%.

European outlook and investment cycle

Respondents predict all European markets to be in a downturn in 2021 with views on the UK in particular weighted more negatively. A proportion of respondents however believe that some markets will level out in 2021 (29% for Greece and 25% for The Netherlands).