European hotel values have fallen by one-quarter over the past two years, according to the latest HVS Hotel Valuation Index.
The survey shows that, on average, hotel values across Europe fell by 13% in 2009. Continuous declines over the past two years mean that hotel values have now dropped by close to 25% in total. However, London bucked the trend in 2009 with year-on-year growth of 14% in sterling terms – a more modest 1% in euro terms.
HVS director Tim Smith said: “Occupancy in central London increased in 2009, with corporate business largely replaced by leisure visitors. Provided hoteliers can manage the transition back to a more balanced revenue stream, they should be well placed to enjoy value growth in 2010.”
HVS said that it expected transactional volumes to pick up in 2010 – provided that debt financing becomes looser – which should allow investors to seize opportunities at significantly reduced prices and later enjoy value growth.
