Business Plan for Hotel Acquisitions Should Target Chinese Investors

There are several good reasons “now” is the time to focus a business plan for hotel acquisitions towards Chinese investors. One important reason is that the amount of capital available from mainland China is on the rise. There is an article worth reading and published this week that highlights several key issues on the why and where of these funds. Here is an excerpt we believe is the key to it: “The U.S. has been continuously considered as the nation with the most attractive capital appreciation,and the lodging industry rebounded in many U.S. markets in 2010. According to the latest HVS Hotel Valuation Index, the recovery in the industry started in 2010, with overall hotel values increasing by 17%. Hotel transactions also rebounded in 2010, with 134 major sales (i.e., an individual asset selling for $10 million or above), and year-to-date 2011 numbers show we are 14 transactions above the level from this time last year.With large amounts of cash on hand to close transactions, Chinese investors have been in a position to acquire hotels in pace with these gains in the market. These investors have been looking mostly at opportunities in major gateway cities, especially on the east and west coasts, where Chinese familiarity with the U.S. runs deepest.” Read more to include these findings in your business plan for hotel acquisitions. There is also some discussion on the EB-5 program as a way of attracting China investors in the story. However, this program is more suited to new construction or expansion of an existing hotel property because of the requirement that the project must create 10 or more jobs. There is also more information on this program from these experts on hospitality industry law that we wrote about in a prior blog. Or, if you are a Chinese investor looking for USA hotel real estate opportunities, please register with our hotel consultancy and we will be in contact. Are you currently developing a business plan for hotel acquisitions and development in the United States? If so, have you targeted Chinese investors and what are the criteria that you will be focusing on to get those funds?