Based on survey results, the panel is bullish (median 67.5%) on the prospect of the 2020 transaction market beating 2019's tally of $62 billion. Interestingly, nearly 1/3 of the panel is 100% confident of this! On the other hand, the panel's outlook on U.S. RevPar for 2020 (median at 50%) is gloomier with nearly 2/3 of the panel believing it less than 50% likely to exceed STR's forecast of 0.5% growth. 

Questions to panel experts: Why are you so bullish on hotel transactions but more conservative on RevPAR? If hotel operating performance stagnates, why will there be such continued interest in acquiring hotel properties? Should growth in hotel performance (i.e., RevPAR) not be a significant force driving hotel transactions and values? For the naysayers on transaction growth, why is this the case?

Marco  Rentsch
Marco Rentsch
Partner, Global Tourism & Hospitality Center of Excellence, PwC Middle East

In mature markets, strong interest by a variety of investors in hotels is partly driven by the lack of alternatives, with many other real estate asset classes being very expensive, or already in a downward cycle (e.g. retail and office). With this trend continuing increased liquidity in the hotel market is to be expected. Conversely, the outlook on RevPAR is rather flat due to the steadily growing supply and the continued macroeconomic uncertainties stemming from the "trade war", BREXIT, etc. The on-going impact of the Coronavirus on global travel will exacerbate this trend. Bottom line: continued interest from investors, even if yields rise.

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