EUROPE The hotel industry in Europe saw a slight rebound in property values last year, with average hotel values per room increasing by 1.5% to €215,200, following two consecutive years of double-digit percentage falls, according to the latest edition of HVS London’s annual Hotel Valuation Index.
Paris and London retained first and second place in the index with the highest values per room, although the 2010 star performers were Frankfurt and Munich, with the highest percentage change in values per room of 19% and 15%, respectively.
Owing to its recent economic turmoil, Athens fell eight places to 27th, with a drop in value per room of 29% to €129,100. St. Petersburg, however, showed a meteoric rise to 10th place from 33rd in 2009, and an increase in values per room of 11%, owing to a significant recovery in hotel occupancy.
Overall, hotel values in 15 of the 33 cities analyzed by HVS are expected to hit all-time highs by 2015. Only five markets are not expected to grow, but they are not predicted to contract, either.
“In prior years, there was a clear divide between Eastern and Western European markets, with cities in the west clearly outperforming those in the east,” says HVS London Director Tim Smith. “In 2010, that clear distinction blurred, with some cities, such as Warsaw, showing growth beyond those in the west. Given the improving conditions in the majority of the countries analyzed, the big question is whether the bottom has been reached.”