Room For Growth, Says Hotel Investment Survey

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The latest hotel investment survey has revealed more room for growth across Europe.

Going Dutch has proved to be the best move so far for hotel investors – with Amsterdam voted the most attractive investment destination in Europe.

London came second and Paris third, according to the latest European Hotel Investment Survey from consultancy firm Deloitte.

A temporary halt on hotel building in Barcelona saw the appetite for investing in one of Europe’s most popular cities dwindle, taking the city down to sixth place in the rankings.

In the sentiment survey across the hospitality industry, a lack of growth in European economies is seen as the greatest challenge foe investors – a view supported by 38% of the 120 experts asked for their views by researchers.

Pessimistic outlook for many investors

In the UK, 73% reckoned UK growth would be around 3%, but Edinburgh and Cambridge are expected to fly ahead of expectations, while 87% are forecasting lower than average growth in London.

The outlook was pessimistic from many stakeholders, with 25% expecting negative growth in London and 20% saying they would not be surprised to see negative regional growth across the UK.

In an industry awash with brands, 74% called for even more, especially to attract millennials (55%) and extended stay consumers (49%).

Half of stakeholders felt the UK hotel investment cycle had peaked, while 25% feel the downturn has started. Hotels in Dublin, parts of Greece, France and Spain were considered as on the opposite of the wheel and in the upturn phase of the cycle.

Call for better pay and benefits for staff

Although the survey was completed before the Brexit deal announcement, 67% perceived Brexit to be the biggest challenge to the industry over the next five years.

Other concerns were a shortage of skilled labour (55%), lack of economic growth (45%), rising interest rates (19%) and protectionism (18%).

Nearly two-thirds feel increasing pay, better career progression and improved employee benefits will attract more skilled workers into the hospitality industry.

“The alternative accommodation sector (25%) has replaced hotel start-ups (20%) as the most popular personal investment choice, which now ties in second place with blue chip companies,” said the survey.

“Almost one in 10 (9%) say they would invest their own money in traditional hotel companies.”

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