The Hotel Times - March 2008 - (Page 14)

COVER STORY: EUROPEAN UPDATE Inadequate supply makes Central and Eastern Europe prime targets for growth. Global hotel performance 2007 US$ 163 113 135 113 157 ADR % change 14.6 6.7 12.7 19.7 11.6 Occupancy Percent % change 69.9 1.1 64.3 -0.2 71.5 0.1 66.4 71.6 3.6 4.6 RevPAR US$ % change 114 15.8 72 6.5 96 12.7 75 112 24 16.8 Europe United States Asia Paciﬁc Central and South America Middle East Source: HotelBenchmark Survey by Deloitte; U.S. data provided by Smith Travel Research Continued from page 12 there are a dozen cities outside of Moscow and St. Petersburg that have a population of more than a million people and need modern hotels. The Baltic States and the Balkans are emerging as well. “They are not markets where you can have dozens and dozens of hotels, but they are markets that have support and will continue to support new supply,” Hudspeth said. Location is of the utmost importance when choosing a new hotel site. Jeremy Hill, director and head of hotels at Christie + Co., said that a great product in the wrong location will not work, whereas an average product but great location probably will work. “Make absolutely sure when you’re doing a new build that you are getting the right site,” he said. hmm@questex.com What are your 2008 banking and trading projections? “For those looking for hotels to purchase, ﬁnding ﬁnance may be difﬁcult, except for those in prime locations, and in such instances loanto-value ratios will be lower, by ﬁve to 10 percentage points. Interest rates will start to increase as banks endeavor to ensure that they expose themselves to less risk.” Russell Kett, managing director, HVS International “There has been a lot of talk about the state of the market and credit crunch and potential recession. The way we see it from our prospective in the U.K., the fundamentals haven’t really changed from last year or the year before in as much as hotels in the U.K. still seem to be trading quite well.” Jeremy Hill, director and head of hotels, Christie + Co. “Generally speaking, the lending banks are lending less as a proportion of the total value or transaction price. Banks see this as an opportunity to do deals which are more beneﬁcial to them than the deals that they have been forced to do over the last couple of years.” Simon Hudspeth, director and head of Christie + Co. 14 The Hotel Times March 2008 www.TheHotelTimes.com http://www.TheHotelTimes.com

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The Hotel Times - March 2008 Business Outlook Editorial Outlook Contents Conference Preview Capital Outlook What's Driving Growth? European Outlook Development Outlook Fractional Outlook Branding Source List Insurance Outlook Brokers Update Brokerage Outlook Lodging's Balancing Act Transactional Facts Lending Outlook Lenders Source List In Closing

The Hotel Times - March 2008

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