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Madrid, Amsterdam and Barcelona are the cities with the most positive outlook for hotel operating performance globally
Six of the top ten city destinations that investors are most positive about globally for hotel operating performance expectations are in Europe, according to new research from JLL.
Madrid, Amsterdam and Barcelona topped the list for hotel operating performance expectations in JLL's annual Global Hotel Investor Sentiment Survey. The survey is undertaken amongst key investors in the hotel sector.
The survey measured the net balance of investors' hotel operating performance expectations. This represents the proportion of respondents who expect hotel operating performance to increase, minus the proportion of respondents who expect performance to decrease and gives an indication of sentiment across the sector.
While hotel investors' outlook for the next two years has shifted from a net balance of 39 % one year ago to 23 %, large transactions have continued to reach completion and the proportion of cross-border transactions is at an all-time high.
Investors expect to see a tightening of yields in 60 % of the markets surveyed in EMEA, with investors most bullish on value appreciation in Madrid, Dublin, Munich and Barcelona. Given ongoing uncertainty from the EU Referendum vote, respondents also foresee a widening of yields in the UK market.
A greater proportion of investors think operating fundamentals in Paris will decrease in the short term. The survey indicates that they expect to see a notable improvement in performance once uncertainty related to terrorism subsides.
Commenting on the survey findings, Philip Ward, EMEA CEO of JLL's Hotels & Hospitality Group, said: "Despite the challenges investors are anticipating as a result of global economic headwinds, real estate private equity funds and institutional investors continue to raise a significant amount of capital. Hotel real estate investment trusts have also posted a recent recovery in share prices."
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