EMEA performs best as global hotel sales decline 71%

About EUR 9 bn worth of hotels were traded globally in the first nine months of 2008, a 71% drop on the record levels recorded in the same period in 2007, according to Jones Lang LaSalle Hotels. All regions of the world have been affected by the turmoil in the financial markets. Americas saw the highest drop (-79%) in hotel investment activity, with a 60% decline recorded in Asia-Pacific and the EMEA region - Europe, the Middle East and Africa - falling 52%.

Jones Lang LaSalle Hotels said EMEA has also proved to be the most liquid of the three regions. About EUR 7.5 bn in transactions was recorded in EMEA in the first nine months of 2008, followed by the Americas (EUR 6.4 bn) and Asia-Pacific (EUR 2.27 bn).

The update on the hotel sector was given by Arthur de Haast, global CEO of JLL Hotels, at the Russia and CIS Investment Conference in Moscow this week. There has been a significant shift in capital flows, he noted. 'Year-to-date transaction data compiled by Jones Lang LaSalle Hotels suggest that across the globe cross-border investors are increasingly being replaced by domestic and intra-regional sources of capital.' De Haast said Europe was the only region showing exception to the trend, where 35% of transactions were undertaken by inter-regional sources including the Middle East and the US.

The data also suggests that the overall profile of hotel investors is changing. 'Sovereign Wealth Funds (SWFs) and High Net Worth Individuals (HNWI) are becoming increasingly important as hotel buyers,' De Haast said. 'On the other hand, the most active sellers in the market are currently property companies and investment funds.'