Welcome to the third edition of Hospitality Matters, our regular bulletin for the hotels industry. This edition is being launched just as the European hotel investment sector de-camps to Berlin for three days for IHIF 2012.
One of the hot topics to be discussed in Berlin will be how we reconcile the two-speed economies that have emerged over the last year. At the European level we have a two-speed regional economy with the Mediterranean countries paralysed by sovereign debt issues and economies reversing due to strict austerity measures, while Northern Europe is less affected.
In the UK and France we have a two-speed hotel market, with London and Paris continuing to trade as though nothing is wrong with the world, leaving the provinces to suffer from the economic realities of stagnant growth, and ever increasing operating costs.
The flight to quality is driving activity in the successful markets for those investors looking for a secure place to park their capital. Meanwhile the distressed sales continue to flow slowly and steadily from the less successful markets, giving those investors with more appetite for risk opportunities to pick up assets at the bottom of the economic cycle.
Whichever you are looking for, happy hunting!