Positive sentiment in the hotel market

Hotel properties are no longer a niche product, as evidenced by strong investor demand. More than 55% of the French investors surveyed increased their investment in hotels in 2018, with two thirds planning to boost their investment in the current year. The prospective returns are a key driver, being rated as better in this asset class than for other property types.

Those are the findings of a survey among French market players commissioned by Union Investment in association with Business Immo. The leading French players were asked about their strategy, their preferred investment locations, and also their assessment of the market and the influence of social trends.

The respondents feel that the French hotel market has become more attractive over the past five years, with increasing demand from international investors.

Hotel properties remain highly favoured, with broad-based demand from investors. The French hotel market offers excellent prospects for institutional investors. In 2018 alone, average revenue per room increased by 7.3 per cent. Of the EUR 5.6 billion currently invested by Union Investment in hotel properties across nine countries, France accounts for a share of just 3 per cent. We want to significantly increase this figure in order to better reflect the strength of the French market in our portfolio.

What sets us apart is the dual competence that underpins our success. In addition to our real estate and financial expertise, we have in-depth knowledge of the hotel sector and a detailed understanding of the challenges associated with this specialist property type. Hotels require a high level of specialisation from investors – with regard to transactions and also contracts. We address the complexity of the hotel market with modern strategies and innovative contract structures.

We currently manage hotel properties in Europe and the US with a total value of EUR 5.6 billion (incl. mixed-use properties). Acquisition opportunities are boosted by our broad range of funds. We invest in existing properties and turnkey development projects. Some 41 per cent of all our hotels were acquired at the project stage. We work with major market players around the world and currently have 38 big-name hotel brands in our portfolio, from the budget to upscale segments.