Published on : Friday, March 31, 2017
Paris has reached the top of Colliers International’s inaugural Hotel Investment Attractiveness Index: An analysis of the investment climate of 20 European cities. Despite predictions that investors and tourists would lose faith in the city due to political uncertainty and threats following various national security breaches, Paris has come out at the top.
Paris’ lead ranking is due to its high demand growth, strong hotel performance, high investment returns and market depth from 2012-2016.
Dirk Bakker, Head of EMEA Hotels, Colliers International said: “Investors are regularly requiring the latest information on cities where they will receive high returns, which in a politically and economically uncertain world, is often difficult to predict. Our index provides something more than anecdotal evidence through which to advise our clients.
According to our latest data, Paris scored highly in terms of yields for valuation and hotel investment volume between 2007 and 2016. It also saw over 15 million international tourists visits in 2015 and witnessed average hotel occupancy levels of over 77 percent from 2012-2016.”
The Colliers index uses twelve metric components, weighted to give each of the 20 locations a score of up to 400, including population; GDP per capital; total workforce; commuting workforce; tourist arrivals; room occupancy; average daily rate (ADR); revenue per available room (RevPAR); land site prices; building costs; yields for valuation and investment volumes. These scores were then consolidated into a single figure and ranked to show which markets are hot in terms of overall demand, their recent operating performance and how this ties into the attractiveness of each market with regards to the acquisition of existing hotels and for the development of new ones.
Some of the highlights are:
Damian Harrington, Director of EMEA Research at Colliers International adds: “With the Hotel Investment Attractiveness Index, we are able to create a unique analysis of a very dynamic market. By combining the twelve variables, we can generate far more of an insight into the current hotel industry and even predict what could lie ahead.”