Hotel sales plummet in H1 2008

The volume of global hotel sales plummeted in the first six months of this year, declining 76% on the bumper period a year ago. Yet $13.9bn (just under EUR 9bn worth) of hotel properties were traded in the first half of this year despite the continuing credit crunch, according to a new report from Jones Lang LaSalle Hotels. The Americas was the worst-performing region (-81%) but accounted for EUR 3.8bn in transactions. Hotel sales in Asia Pacific finished down -67% and EMEA came in at -59%.'

'Whilst transaction activity has shown a marked decline from the historical highs achieved over the last two years, we are still cautiously optimistic about the future of hotel investments over the medium term,' said Arthur de Haast. Global CEO of Jones Lang LaSalle Hotels. 'Hotel investment volumes are now at a level comparable to that of 2004, which similarly recorded $14.0 billion worth of transactions within the first half of the year.'

JLL Hotels said the volumes in the first half of 2008 were still significantly higher than the record lows of 2002/2003 due to the September 11 attacks, the Iraq War and the SARS outbreak.

The hotel investment market has undergone new changes because of the tightening of credit in the aftermath of the advent of the subprime mortgage crisis in the US last summer. Over 80% of transactions carried out globally this year have involved sums of less than $100mln (EUR 64mln). Only one deal of $1bn (EUR 640mln) took place. In contrast, there were a dozen transactions of $1bn-plus last year. JLL Hotels also said that the profile of buyers has changed. Private equity players were the most active buyers in the last few years but the balance has now switched in favour of hotel and serviced apartment operators.