The hotel sector is remaining buoyant largely thanks to a strong leisure travel market, a new report has claimed.
Issued by hotel investors Jones Lang LaSalle Hotels, the Hotel Investment Outlook 2008 claims hotels worth a total of £56.7 billion changed ownership thanks to various acquisition deals.
These deals also happened in spite of the global credit crunch which has led to a slow-down of business around the world.
The report claims that while business travel spends are dropping, hotels are benefiting from the leisure market which is being driven by the cash-rich baby boomers.
Jones Lang LaSalle Hotels, Europe, Middle-East and Africa chief executive Mark Wynne-Smith said: “Over the next year we expect to see more activity – transactions and development – in the Middle-East and Central, Eastern Europe, particularly Russia.
“We’ve seen that the Middle-East is making a serious bid for the tourist dollar by tapping into the Northern European market.
“Turkey has ambitious tourism development plans, as do Tunisia, Algeria and Morocco. These markets have benefited from tourists’ desire to try something new, a trend that will make it harder for traditional markets such as Spain to compete.
“Likewise, Russia is a developing market with a large number of projects in the pipeline; meanwhile the market is heavily under supplied allowing some hotels to achieve premium room rates.”
However, he warned acquisition spending will slow over the forthcoming year while hoteliers will still have to adjust their business models in order to still generate good business returns.