The total volume of European hotel transactions fell 69% in the year of the pandemic after a record the previous year when 27 billion euros of hotel transactions were concluded.
According to the European Hotel Transactions 2020 annual report, released this week by HVS and its brokerage and investment services division HVS Hodges Ward Elliott, hotel transaction volume reached 8.5 billion euros last year.
Single asset transactions accounted for 65% of all transactions, totaling € 5.5 billion, while portfolio transactions accounted for 35% at € 3 billion.
Before the pandemic, 2020 was set for record trading levels.
The year got off to a strong start with transactions in January and February up 2.5% compared to 2019 with volumes of 2.7 billion euros and a 1.8% increase in average selling prices per room at 170,000 €.
Subsequent lockdowns across Europe, coupled with limited availability of debt financing, lowered transaction levels by 66% with just one type of buyer, high net worth individuals, investing in larger hotel volumes. than the previous year.
In total, 201 European hotels and more than 44,000 rooms changed owners in 2020.
The UK maintained its position at the top of the deal rankings, posting the highest level of investment volume in Europe with a total of 2.1 billion euros (1.8 billion pounds).
Some 1.6 billion euros (£ 1.4 billion) of UK transactions were based in London.
Germany retained second place in the transaction ranking, with a total hotel investment volume for the year reaching 1.7 billion euros.
Munich was its most favored city with 501 million euros in transactions.
Looking ahead, HVS expects the second half of 2021 to start showing signs of a recovery in transaction volume as economic support programs collapse and loans are refinanced, but the bulk of the recovery is expected to occur in 2022 alongside the rise in hotels. income stream.
“The full impact of the pandemic is expected to hit the trading market later this year with an increase in distressed debt and opportunistic investments before a gradual market recovery.
“However, most of the volume recovery is expected in 2022 as vaccination programs are completed and the leisure and business travel sectors begin to recover,” commented the author of the report. Shaffer Patrick, Partner, HVS Hodges Ward Elliott, London.
Take a look at the full report here.