A Brief Look at Hotel Investment Trends

Hotel Investment Trends pic
Hotel Investment Trends
Image: htrends.com

Bharat Lall, MD, serves as president and CEO of Pinnacle Hotels USA, which provides management services for such popular brands as Hilton and La Quinta. An authority on hotel investment, Dr. Bharat Lall leverages his years of experience to provide high-level insights into the industry.

Predictions for the global industry in 2016 indicate that total revenue could reach figures as high as $550 billion–an increase of nearly $100 billion over the last five years, translating to revenue gains of nearly 25 percent. This figure indicates an upward trend in hotel investment, as more and more investors are looking to get their piece of the pie. However, more and more of these investment dollars are flowing outside the United States.

In terms of capital projects, investors are looking toward Europe, and Asia Pacific to a lesser degree, because those regions boast some of the highest occupancy rates in the world. What the Middle East and Africa lack in occupancy, they make up for in price, as they are typically the regions with the most expensive rates. Both of these factors prove inviting to investors looking for more global opportunities.

Conversely, North American investment is declining a bit, with a larger volume of capital flowing in from Asian sources. Throughout 2015, 35 percent of all hotel investments came from overseas, with a third of that number emanating from Asian investors. High property yields and a more secure investing landscape are attracting these investors to look beyond their domestic markets and into Europe, and in some cases Australia, for new opportunities.

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