Globally, hotels have been the asset class most impacted by the Covid-19 crisis with sales of hotels down by 50% in the first five months of 2020 in comparison with 2019, Real Capital Analytics latest data show:
second quarter was particularly slow with just 113 hotels sold
worldwide since the start of April compared to more than 850 changing
hands in the second quarter
of 2019. The scale of the slowdown in Europe is similar and just 36 hotels have traded since April 1. Only six hotels have
so far in June, which puts this month on track to be the slowest on record in Europe.
Tom Leahy, Senior Director, EMEA Analytics at RCA, said: “Some large assets have changed hands in Europe in the past three months, which has pushed transaction volumes just north of $1 billion. The Bauer Palazzo, a luxury 210-key hotel in Venice, was bought in May by Signa Group, an Austria-headquartered investor, for $270 million. At this price and at more than $1.3m per key it is the most expensive hotel to trade so far in the second quarter.”
Leahy added: “Travel restrictions, the cancellation of major commercial events and the near-shutdown of the global tourism industry have created something of a perfect storm for operators and owners. Moreover, there are no guarantees that it will be business as usual when lockdown and travel restrictions ease, with the possibility of longer-term changes in consumer and business travel trends.”
In Europe, Greece, Portugal and Spain — countries where tourism is a large component of GDP — have all said they will open up for the summer holiday season so we will get an indication as to the potential scale of a recovery in international leisure travel. But the long-term impact of the virus on both tourism and business sectors is unknown and difficult to forecast. What is certain is that most income-driven investors dislike uncertainty and this will continue to drag on the sector.
Source : RCA