Hotel Ownership and Asset Management (1)

Ongoing geopolitical tensions across the Middle East are having a real commercial impact on hospitality, tourism and leisure businesses worldwide. Uncertainty is now shaping how travellers make decisions — where they go, how far ahead they book, and how confident they feel about travel at all.Airspace restrictions and rising operating costs have dampened visitor demand in some regions, while destinations seen as safer alternatives — particularly in Southern Europe, Asia and the Americas — are picking up displaced demand, especially at the luxury and ultra-luxury end of the market, notoriously oblivious of geopolitical tensions.Investors and developers are also treading more carefully.

It’s a great relief that there are now signs of a lasting peace in the GCC, which will bring stability back to a region which has driven significant growth in hotel supply, particularly in the luxury sector. While geopolitical tensions inevitably create uncertainty, we have seen capital pause rather than withdraw and expect to see a resurgence in activity now that a MOU has been signed.

Much of the industry conversation has focused on what recent Middle East tensions might take away from travel demand. The more interesting question, from where I sit in Portugal, is where that demand goes instead.In my recent piece on the next European hotel buy cycle, I noted that while top-line demand should remain broadly stable in the short term, it will be increasingly reallocated across destinations.Portugal’s latest tourism statistics show the country entered this recent period of geopolitical tension from a position of sustained strength.