European countries with strong domestic leisure and corporate travel demand will recover raster than those more reliant on long-haul tourism, according to new research from global real estate advisor, CBRE.
The partial reopening across markets last summer showed that local demand was key
“We expect a slow recovery across the market in 2021 but with pent up demand driving strong performance in the leisure sector during the summer months and early autumn. Consumer behaviour will continue to drive product innovation and ESG will becoming increasingly important. Operating structures will continue to evolve, and franchises will remain the predominant way most brands continue to grow distribution,” Owen Pritchard, Executive Director and COO, EMEA Hotels at CBRE, said.
The overall market is not expected to recover to pre-pandemic levels until 2024 and the current conditions resulted in hotel investment to the end of Q4 2020 falling 75 percent year-on-year to €6.6bn.
But even with that sustained level of activity the market remains attractive with significant additional capital raised last year by a wide range of investors to target hotel opportunities.
“Lack of stock and disparities in buyer and seller pricing expectations added to the already challenging year that the hotel sector faced as a result of the pandemic. As we look forward, we expect deal flow to pick-up towards the second half of the year as capital continues to be raised for the hotel real estate sector and pricing expectations become more aligned,” Miguel Casas, Head of Hotel Investment Properties, Continental Europe at CBRE said.