The Top 5 Trends in Hotel Investment for 2015

The global economy continues to grow at a pace that is encouraging an increase in both domestic and international travel. With travel and tourism representing just over 9.5% of gross domestic product globally, this is having a positive impact on hotel investment. The following five trends bear watching in the coming year: Mergers and acquisitions are increasing. Through Q3 2014, there was an 8% increase in hospitality and leisure transactions. This trend is being fueled by cross-border capital investments which accounted for more than 41% of global hotel investment. The Asian tiger is roaring. China, Hong Kong, Japan, and Singapore represent a growing force to watch. Investors from these regions are investing heavily in North America, Europe, and Australia. “Millennials” are traveling. This is influencing the features and services that hotels provide. Once considered a niche market, millennial tastes are slowly shaping everything from hotel design to the way hotels are being marketed to the public. This is leading to an increase in specialized hotels providing everything from eco-tourism to adventure travel. Regulatory scrutiny is increasing. Governments around the world are tightening investment rules and enhancing regulations in order to maximize the amount of revenue generated from the hospitality industry. Investors must carefully consider and analyze these rapidly changing factors when assessing the profitability of their investments. The industry is stable and growing. Global volume exceeded $68 billion in 2014. This was a 15% increase from the previous year, and it represents the 3rd highest total on record. The United States led the way in hotel transactions, comprising over $34.5 billion of that total. Europe followed with $24.7 billion, and Japan came in next with $8.5 billion. The hotel and hospitality industry is shaping up to break records both domestically and internationally. The industry has shown considerable resilience and adaptability to both market conditions and consumer demand. This is leading to an increase in hotel investment and stable growth within the hospitality industry. For more information, we invite you to contact us.