Continuing economic growth extends hotel cycle

The global travel market remains robust, leading to positive hotel operating performance in all three global regions. The travel market continues to be buoyant with rising numbers of international travellers, while growth has also been underpinned by a recovery in visitor arrivals in key cities such as Paris which had previously suffered declines.

Hotel transaction volumes lower despite investor confidence

Continuing economic growth is supporting a healthy hotel investment environment, with global hotel transaction volumes totalling US$62.5 billion in 2017, on par with the levels seen in 2016.

Asia Pacific posted an impressive uplift in volumes, up 42% compared to 2016. The result was largely due to R&F Properties’ investment in Dalian Wanda Group, a portfolio of over 60 hotels located across China. EMEA also achieved a steady rise in transactions levels, a sign that political uncertainty surrounding the multiple elections did not suppress investor appetite. The Americas saw an 11% year-on-year decline in volumes, in part due to a 40% decrease in portfolio transaction volumes in the U.S.

Private equity groups remain most active buyers

Investment funds and private equity firms were the most active buyers in 2017, representing 30% of the market. Developers and property companies ranked second with 18% market share, driven by R&F Properties’ purchase of hotel assets from Dalian Wanda Group. Institutional investors continue to increase their allocation to real estate with their share of acquisitions more than doubling since 2014, from 4% to 10% in 2017.

Find out more about Global Hotel & Hospitality market trends and outlook for 2018

More on Hotels Markets

Hotel Investment Outlook 2018: global GDP growth, strong travel and tourism trends pave the way for continued positive hotel operating performance and investment prospects.

Read More

Why France’s hotel sector is on the road to recovery

Read More

How midmarket restaurants can stay at the top of their game

Read More

Can Saudi Arabia become the Middle East’s new entertainment hub?

Read More