We have now entered the second month of 2021 and while travel remains subdued, activity certainly has resumed in hospitality investment and development.
Hotel investors are busy making deals, as Reuben Brothers announced this week with Baglioni Hotels & Resorts in Italy. Meanwhile real estate investors who were so far more interested in other asset classes are sniffing the opportunities in hospitality distress, as Activum, Tristan Capital Partners and new kid on the block Trinity Hotel Group discussed with us recently. But is there much distress for them to sink their teeth into? Questex’s latest Investor Sentiment Assessment sees some frustration from some investors within the European hospitality industry, “as ample policy liquidity from the central bank and fiscal support through furlough schemes have reduced liquidity and maintained valuations high”. Nevertheless, opportunities in leisure real estate continue to attract interest, as “even with this pricing disconnect there still remains plenty of interest especially when you factor in the attractiveness of the market compared with other areas in the hospitality sector”.
In the US, New York City continues to prove that it “always believes that something good is about to come off, and it must hurry to meet it', as Dorothy Parker said. It is certainly showing in its hotel development pipeline, as the downturn is seen by some as a “once-in-an-ownership-lifetime opportunity,” with empty hotels that will fill up again as travel resumes.
In other news Marriott’s Arne Sorenson has announced he is stepping back to focus on his health, so let’s conclude on a positive note from Mr Sorenson himself: “Remain optimistic. This crisis will pass. But not before we work together as a global community to find common solutions”. We send him our best wishes.