From a confidential tip to a global investment trend

  • 11/07/2016
  • Created by Thomas Wührer
Vom Geheimtipp zum Investmenttrend © Erich Estendarp / pixelio.de

Hotel real estate in Austria and Germany

In general the hotel business in Central Europe is admirably profitable. The demand for contemporary lodging still rises, the occupancy rates in the German Top-7 towns is between 60 up to 80 percent. One may speculated on the reasons. But obviously system competitors like AirBnB do not influence the classical overnight business hard. Higher mobility, older travellers with good financial background, short excursions over the weekend and city visits might contribute on the leisure side to the full plus. For business travelers, it is probably the generally booming economy, in particular the excellent economic situation in Germany, which provides good figures. Thus for example, in German cities, but also in Vienna or Salzburg, the overnight figures rise faster than the bed capacities.

Hotels overtake commercial real estate

At the same time, for investors hotel real estate moves stronger and stronger from the niche in the center of their interest. No wonder: With yields of one to two percent above other commercial real estate like office buildings, logistic centers etc. in comparable location, hotels are more attractive. Especially if the security is guaranteed. Long-term lease contracts, often with international operators or experienced hotel managers, the market-customary obligation to preserve the equipment as well as the obliging to build up financial reserves by the operator, are only a few examples of the fact that hotels generate with certainty in the long term admirable yields. Of course the quality of the real estate must be good. This expresses itself in the location, also in the architecture, the equipment, the service and – more and more – in the concept and the brand of the operator. With it new guests are acquired, their expectations are fulfilled efficiently and finally – in the ideal case – guests become satisfied return customers.

High demand also in smaller towns

In Germany the transaction volume for hotel real estate increased in 2015 to a total of 4.4 billion Euros. In comparison to 2005 it rose about 1.4 billion Euros and also put the preceding record year laxly in the shade. In Austria in 2015, hotel real estate with a total value of approx. 310 million Euros changed the owner. Also here the last year's result was clearly excelled. And for 2016, further increase can be expected on account of the very good quarter figures once more. The new attraction of hotel real estate as an investment expresses itself, in the meantime, also in an offer becoming more and more thinly. This moves more and more B and C cities for property and monetary investors in the focus as well as the change of former office buildings to hotels.

Whether purchase or sales: It’s time to act!

HOTELINVEST reacts to this strong trend on the one hand with the specific search for hotels with good potential and, on the other hand, with a recommendation for investors: Observe the market not too long, but secure yourself the chance of a strong and sure investment, before the prices rise on account of the little offer of qualitatively high-quality hotels. The unsafe situations in the financial markets and at the central banks add further stress. Since successful investments are above all a question of the right timing! No matter if you buy or sell, our expert Thomas Wührer is glad to assist and support you. 

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