BERLIN — Current geopolitical problems are causing some disruption to the international travel market, but hotel industry experts during the second day of the International Hospitality Investment Forum EMEA signaled those challenges shouldn't sink hoteliers' optimism.
There will be turbulence caused by trade wars, travel advisories and potential economic hardships, but conference speakers pointed to the strength of consumers' desire to travel, a trend that started before the pandemic and has accelerated since. For hoteliers in Europe, the Middle East and Africa, that may even mean an increase in inbound international demand as travelers from other parts of the world may decide to avoid travel to the U.S.
Investors also are interested in buying hotels across Europe, both through individual deals as well as portfolio sales. Interest, however, doesn't translate to activity quite yet; would-be buyers say they're still approaching acquisitions carefully. Once the deals faucet turns on, though, speakers said they expect a wave of owners selling off non-core hotels as they try to right-size their portfolios.
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Quotes of the day
"Taylor Swift singlehandedly grew [average daily rate] for many markets, 52% growth ADR on the Eras Tour nights." — Aoife Roche, vice president of sales, EMEA, at STR, referring to Taylor Swift's European leg of her world tour in 2024
"Overcrowding is an issue that's not going away, and that needs to be confronted, challenged for a lot of destinations. But the biggest issue out there is expense. I think we've heard about how people, over the past year, did move away from economy and luxury was was gaining. There's still absolutely huge amounts of growth in luxury, but we think people are going to be moving back more, a bit more toward the midscale/economy segments over the next year or so as people really look for value for the money out of their travel." — David Goodger, managing director, EMEA, at Tourism Economics
“Wall Street does not need to know how lifestyle hotels are different. For them, it is about fees per key, and we have very strong fees per key across the firm. [Lifestyle] can be extremely profitable even at a limited scale.” — Mark Hoplamazian, president and CEO, Hyatt Hotels Corp.
Editors' takeaways
Even though there's economic and political uncertainty abounding, investors are interested in hotel deals across Europe. The transaction market picked up pace in 2024, and there's reason to believe 2025 should be another good year for deals.
During her presentation, Carine Bonnejean, managing director of hotels at Christie & Co., said investors no longer see hotels as an alternative investment but a mainstream one. They proved their resiliency during the pandemic as well as through inflation, making them a highly desirable piece of commercial real estate. Preliminary numbers show roughly €4 billion in European hotel transactions during the first quarter.
"It's been a seismic change in the way hotels are perceived by real estate investors, and we can see a lot of funds being now dedicated to hotels, which is very good news for all of us, and particularly because we can find more buyers for hotels," she said.
— Bryan Wroten, senior reporter
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There certainly was a de-escalation in the rhetoric from Day 1 of the International Hotel Investment Forum to Day 2, mostly because Day 2 was dominated by the CEOs of the major hotel firms, who always have one eye permanently fixed on the stock exchanges of London, New York City and elsewhere. Hoteliers are consummate professionals, not wanting to rock the boat, but then again they might not have reason to.
Business is good in Europe. Investors are looking at hotel real estate favorably, fees are coming in, demand generators are constant and even improving. While leisure travel remains robust, business travel improved in 2024 and will continue to do well in 2025. By the end of this year, the industry might see the return of the Chinese traveler.
The question is, and this was voiced numerous times during Day 2, where is the Chinese travel going to go to. To the U.S.? No way! Not at the moment. The welcome is not there. To Europe? More so, yes, to the iconic European cities, to world-class cities such as Paris, Madrid, Athens and London. But then again. they might remain in Southeast Asia, where they have been quite happy since the end of the pandemic.
If we only just get along with one another, IHIF panelists urged, with the hotel industry helping to — as it always has done — acknowledge that we are all the same, that people want to travel to meet other people, and then welcome them back to their countries, that traveling is one of the privileges of our time, and that it is the differences that make up the whole. That is what is entirely responsible for us booking plane tickets and hotel rooms.
— Terence Baker, news editor, Europe, Middle East and Africa
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