Hotel values in Europe fell by 13.4% last year, says survey

31st March 2010, 8:20am

Hotel values in Europe fell by 13.4% last year, taking the overall decline over the past two years to almost 25%, according to HVS, the hotel valuation consultants.

The HVS European Hotel Valuation Index, which tracks four- and five-star hotel values in 36 markets, found that London bounced back from the 11% fall suffered in 2008 to achieve a 14% increase in 2009 in sterling terms (or 1% in euro terms) to £431,000 per room (€484,000).

London was placed second in the valuation league table last year behind Paris, which despite a 4% decrease, still recorded the highest value per room for the second year running at €546,000.

Tim Smith, co-author and HVS director, said: "Provided hoteliers can manage the transition back to a more balanced revenue stream as corporate demand recovers, they should be well placed to enjoy RevPAR and value growth in 2010."

He added: "Part of the popularity of the UK, and London in particular, as a place to buy hotels is down to the cheapness of sterling against major currencies like the euro. But a significant factor has also been the flight to less volatile markets by international investors."

The report concludes that, even though the industry may suffer further falls in room rate in the early part of this year, most hotels will have stabilised trading by the end of 2010, with many enjoying growth in profit, therefore boosting the value.

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