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European Hotel Sector Review of 2007

European Hotel Sector Review of 2007. Russell Kett Managing Director HVS – London Amsterdam – 16 January 2008. Key Trends for European Hotels. Occupancy and room rate Hotel valuation Transactions. Europe – Still the RevPAR King. Seasonally Adjusted RevPAR. $115. $103. $99. €87. $64.

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European Hotel Sector Review of 2007

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  1. European Hotel Sector Review of 2007 Russell Kett Managing Director HVS – London Amsterdam – 16 January 2008

  2. Key Trends for European Hotels Occupancy and room rate Hotel valuation Transactions

  3. Europe – Still the RevPAR King Seasonally Adjusted RevPAR $115 $103 $99 €87 $64 Sources: HotelBenchmark™ by Deloitte; Smith Travel Research

  4. European hotel occupancy %

  5. European hotel ADR €

  6. Hotel RevPAR 2006-07 YTD Nov (€)

  7. Key Trends for European Hotels Occupancy and room rate Transactions Hotel valuation

  8. Hotel investment volumes (€m)

  9. European single asset transactions

  10. Buyer categories 2006 (€m)

  11. Key portfolio transactions – 2006

  12. Key portfolio transactions – 2007

  13. Key single asset transactions – 2006

  14. Key single asset transactions – 2007

  15. Key Trends for European Hotels Occupancy and room rate Transactions Hotel valuation

  16. Value trends – winners & ‘losers’ 2006

  17. Values – Top 10 European cities €/room

  18. Outlook and Expectations Most locations – RevPAR growth, now mainly rate driven, profits up, values up… Strong buyer demand prevails – yields unlikely to fall further – now is a great time to sell… Pre-”crunch” – sale prices might have risen because of increased projected earnings… Expectation of current buyers is to sell in 3-5 years’ time – who will those buyers be…? Issues – debt provision, human capital, sustainability – but… Effect of current market turmoil? Have we reached the end of the cycle?

  19. “Credit Crunch” – Today’s Update… US investment market, CMBS – stagnant, nervous Middle East – no effect yet Deals in Europe – many stalling, few completed Larger ones – longer to come to fruition Quality assets & operators – interest prevails, little or no impact so far Secondary assets / larger portfolios – tougher Banks – reducing LTVs 5%–10% points Interest rates up 50–90 bp’s Yields moving out by 0.25%–1% Short term issue – 3-6 months…?

  20. Thank you! Russell Kett Managing Director HVS International7-10 Chandos StreetCavendish Square London W1G 9DQTel: 020 7878 7700Fax: 020 7878 7799rkett@hvs.comwww.hvs.com

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