Greater focus on hotel companies

However, the finance investors meanwhile are no longer interested only in hotel real estate, but have started to focus more on hotel companies. It is no wonder that with the large industry players, fear of takeovers is growing.

“One of the most notable examples of this development was the purchase of the Hilton shares for 26 billion US-Dollars by investor Blackstone, a few weeks ago”, reports Ulrike Schüler, Managing Director at PKF hotelexperts. Dolce International, a company specialised in conference hotels, was bought by the private equity company Broadreach Capital Partners in July this year with an 85-percent share. “We are investing in firstclass and experienced operators, and are expecting this to be the most expansive market of the future. This segment has been overlooked by investors so far”, says Philip Maritz, Managing Director of Broadreach Capital Partners, describing the reasons for the involvement in the hotel company.

Considering the large interest in the hotel market, it is not surprising that experts are talking about record highs this year too. “The transaction volume of the hotel market in the entire world is being estimated at over 80 billion Euros in the first six months of this year, whereby the Hilton acquisition is included in this number”, says Matthias Schröder, Partner at PKF hotelexperts. This figure is already almost twice that of last year’s result of roughly 43 billion Euros. The expert is not expecting anymore increasing in purchase prices though. “I cannot imagine that someone would pay 25 times the yearly ground lease for a four-star hotel”.

Source: Jones Lang LaSalle; Date: 2007