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More than 95% of hotel property and investment professionals favour a remain outcome for next week’s UK EU referendum, claims new research.
A straw poll, conducted at the second annual Market Connections event organised by hotel consultancy firm HVS, saw an audience of 80 investors, operators and property developers express their views on the outcome.
HVS said the majority felt that the effect on the UK hotel sector would ultimately be neutral, but pointed to concerns over the issue of finding enough staff of the ‘right calibre’ to operate hotels of immigration were to be ‘severely curtailed’.
Charles Human, managing director at HVS London, said: “The overwhelming feeling from our audience was that Britain should remain within the EU, not least because it removes huge uncertainties as to what will happen if there were a vote to leave.”
Presenting a positive outlook for the global hotel investment community, he added hotels represented the fastest growing category of property investment – rising 40% between 2013 and 2015 compared with non-hotel property investment up by 26%.
In 2015 some €25bn (£19.8bn) was spent on hotel real estate across Europe, compared with €14.4bn (£11.4bn) in 2014 while global hotel transaction volume rose by 61% to €73bn (£57.7bn).
Human revealed that while the majority of the institutions and private equity companies investing in the European hotels market are based in Europe (43%) the strongest investment growth is currently stemming from Asia.
Between 2007 and 2015 investment from Asia rose by a massive 1,262%, with investment from the Middle East seeing an 87% rise over the same period.
Dispelling the speculation that the UK, in particular London, has reached the tip of its hotel property cycle with revenue per available room (RevPAR) starting to slow, Human pointed out that demand for hotel property in London is still outpacing supply.
London remains second in the top five most popular cities for hotel investors after New York, and followed by Los Angeles, Hong Kong and Paris.
In the shorter term, Human pointed out that economic uncertainty combined with issues such as terrorism, the forthcoming US Presidential election and the Brexit vote has prompted a 60% decline in global hotel investment volume in the first quarter of 2016 and the year is expected to end with around €11bn-worth (£8.7bn) of investment, compared with €25.8bn-worth (£20.4bn) in 2015.
However this is expected to improve as we move into 2017, albeit that next weeks referendum vote could slow some of this down.
