Christie & Co sells more hotels than any other broker and has an unrivalled level of market intelligence compiled over more than 80 years.
Over the years, France has confirmed its attractiveness. It is the first world touristic destination when taking into account international stays, and ranks 3rd in terms of revenue.
2015 is set to reach a new record of tourist arrival as forecasts are estimating that there will be over 85 million foreign visitors, compared to 83.8 million in 2014. The number of overnight stays, including French and international visitors, were estimated at 198.4 million in 2014.
There are around 18,000 hotels in France with a combined capacity of 650,000 rooms, generating a turnover of almost 16 billion euros. Among them, 80% are ranked mostly in the 2 and 3 star categories. Half of the hotels are brand free and 30% are affiliated to independent hotel chains such as Best Western. 20% belong to hotel brands such as Accor and B&B Hotels, and represent almost half of the accommodation capacity. Most of them are situated in urban areas and are open all year long against 4 out of 10 for independent hotels. Source: INSEE and DGCIS
In spite of a slow general economic recovery, hotel performances in France during the first half of 2015 recorded a positive growth in RevPAR, and upscale hotels registered the strongest increase. Foreign travellers have been the largest contributors of this incremental demand taking advantage of favourable exchange rates.
This trend, combined with a general positive investment sentiment encouraged by low interest rates, has encouraged an active transactional activity. Since January, several deals have completed including the sale of the Louvre Portfolio bought by JinJang Hotels for €1.3bln. Middle Eastern investors have been the most active with several hundred million euros being transacted such as the InterContinental Paris, acquired by the investment arm of Qatar, Constellation Group, and the main source of equity on the Groupe Hotels du Roy deal was provided by a Kuwaiti based investor.
The hotel real estate sector is proving to be an attractive commercial investment option. Hotels with a capacity of more than 70 rooms located in renowned city centres offering rebranding opportunities are increasingly sought after targets, appealing to a diverse investor profile including private hoteliers, franchisees, private equity funds and asset managers acting on behalf of third party investors. Paris continues to remain the most desirable city by hotel investors, as performance remains solid, followed closely by Lyon, Marseilles, Nice or Strasbourg.
What does the future hold?
Hotel investors and operators are facing a competitive environment as the travel industry is rapidly changing. On-line travel agencies and other websites offering residential lodging have become easy tools for travellers to find accommodation, resulting in considerable changes in travelling behaviours. Hotel operators at corporate level are today extending their services and building marketing services to keep hold of their market share and maintain investors and partners’ confidence in this ever changing environment.
Not only is consumer behaviour changing, but also the legal landscape, which makes it important to partner with a company who can keep you informed of regulatory obligations as well as provide you with the detailed analysis required during the sales process.
Christie & Co can provide detailed audits, legal advice and regulatory insight to ensure negotiations run smoothly.