News for the Hospitality Executive
Nov. 17, 2011 – Jones Lang LaSalle Hotels today released its bi-annual Hotel Investor Sentiment Survey, which reveals that an increased 38.6 percent of investors across the globe indicated a ‘buy’ strategy for the next six months, representing the dominant investor strategy for their short-term outlook. The largest uptick in ‘buy’ sentiment was recorded in Asia Pacific, followed by the Europe, Middle East and Africa (EMEA) region. In the Americas, although investors’ ‘buy’ sentiment decreased slightly, it still remains at the highest point of the three regions. The firm’s proprietary survey is directed toward the world’s 6,000+ leading hotel investors and owners.
“In the short-term, the markets that ranked highest for acquisition targets across the globe include Scandinavian cities Stockholm (66.7 percent) and Copenhagen (62.5 percent). Chicago, Milan and San Francisco round out the top five cities,” said Arthur de Haast, global CEO for Jones Lang LaSalle Hotels.
Upscale assets continue to be the most sought after asset type globally, though midscale properties have gained favour. Private equity and real estate funds are the most likely buyers around the world in the near-term.
“The ‘sell’ sentiment continues to be strongest in EMEA at 13.8 percent, and lowest in the Americas at 7.8 percent. The Spanish resorts continue to top the global list of ‘sell’ targets (60 percent), followed by Marrakech (40 percent) and Moscow (36.4 percent),” added de Haast.
The survey also serves as a timely gauge of investors’ outlook for hotel operational performance following the economic headwinds that many major markets have faced since late summer 2011.
“On a global weighted average basis, the proportion of investors exhibiting a positive outlook for performance fundamentals over the next six months has softened by 27 percent, but is still at a more favorable level than one year ago,” said de Haast. The share of investors that have a positive performance outlook for the next two years has been only marginally impacted, decreasing by less than 12 percent.
The survey found that hotel performance expectations continue to be highest for the global gateway cities for both the short and long term. Investors exhibited the highest six month performance outlook for San Francisco, London and New York, followed by Istanbul, Hamburg, Munich, Paris, Boston, Miami, Singapore and Sydney.
In terms of regional shifts in investor sentiment, the Americas saw the most pronounced decline of the three regions, but the proportion of investors indicating a positive outlook still matches the level recorded one year ago.
Investors active in EMEA exhibited weakened hotel operating performance expectations both in the short and medium term. “Yet fundamentals have not shown any deterioration, and on a city level, 54 percent of all cities tracked in EMEA are anticipated to show growth in the coming six months and 81 percent when considering the medium term,” said de Haast.
In contrast, Asia Pacific posted little change (-2.1 and -1.9 percentage points respectively) with investor sentiment still weighted firmly in favour of continued revenue per available room (RevPAR) growth. As a result, the Asia Pacific region, home to a number of emerging powerhouse economies now has the highest positive investor expectations over the next six months.
“The survey affirms that, while investor sentiment is more delicate than it was in our previous survey, investors’ intentions to buy assets globally are still on the rise, evidencing respondents’ strong interest in pursuing acquisitions. Additionally, our survey respondents expect hotel operating fundamentals to continue to grow in 2012, even if at a slower pace,” said de Haast.
About Jones Lang LaSalle Hotels
Jones Lang LaSalle Hotels, the first and leading global hotel investment services firm, is uniquely positioned to provide the depth and breadth of advice required by hotel investor and operator clients, through a robust and integrated local network. In 2010, Jones Lang LaSalle Hotels provided sale, purchase and financing advice on $4.1 billion worth of transactions globally. In addition, advisory and valuation services were provided on over 1,000 assignments. The global team comprises over 225 hotel specialists, operating from 39 offices in 20 countries. The firm's advice is supported by a dedicated global research team, which produced 70 publications in 2010 in addition to client research. Jones Lang LaSalle Hotels' services span the hospitality spectrum; from luxury single assets and large portfolios to select service and budget hotels, resorts and pubs. Services include investment sales, mergers and acquisitions, capital raising, valuation and appraisal, asset management, strategic planning, operator selection, management contract negotiation, consulting, industry research and project development services. Jones Lang LaSalle Hotels' clients have access to the resources of its parent company, Jones Lang LaSalle (NYSE: JLL). www.joneslanglasallehotels.com
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