World Panel
Viewpoint11 February 2020

2020 Hotel Transactions and RevPAR

Hotel Ownership, Development and Management

— 10 experts shared their view

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This viewpoint was created by
Demian Hodari, Associate Professor of Strategic Management at the Ecole Hôtelière Lausanne (EHL)
Dominic Seyrling
Director – Investments at Archer Hotel Capital

I am a bit surprised to read this. From memory I was not quite so positive in my response. Although it has to be said that my expertise lies predominantly in Europe. I would have expected there to be a strong correlation between RevPAR trends and investment trends. The premise is that as RevPAR reaches new peaks so do capital values. And when capital values are at or near peak the bid/ask gap tends to be lower. In a perfect world this should lead to more transactions.

Practically speaking we are at peak RevPAR (across Europe) with limited growth on the horizon. Hence, there should be some willing sellers out there which should make for a reasonable amount of transactions. Although there are some markets which have already turned slightly which immediately increases the bid/ask gap. Hence, I'd argue - notwithstanding some big portfolio deals which can always change the year-on-year results - that significantly increased transaction volumes in absence of RevPAR growth is not very likely. 

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