AHV are bullish on hospitality, lean in to find out what is driving this optimism?
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Harrington is very bullish on a strong recovery for the hospitality industry, as he has seen that not only are business meetings coming back but there is potential for hotels to emerge from the crisis in a better place with more efficient businesses. ESG compliant hotels will potentially be a very exciting segment for the industry as it is expected that the corporate demand for green hotels will lead to higher occupancy and higher ADRs, while costs will be lower for funds as investors are keen to invest in green real estate and they will also benefit from lower yields as Institutional buyers are also moving towards ESG compliant ventures.
The hospitality sector is still very attractive, leisure and extended stay markets in particular. While transactions have been low due to the lack of assets on the market, the premiums have been high. AHV expect transcaction activity to increase substantially for all areas of the hospitality industry.
But there is an argument that we are going through a boom, is there a chance that valuations and expectatioins will get too frothy?
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