Sharp declines in revenue caused by the pandemic coupled with a more cautious approach to lending has prompted hotel valuations to fall over the past 12 months, although not as steeply as some had initially anticipated.
This is the key finding of the annual European Hotel
Valuation Index (HVI) compiled by global hotel consultancy HVS, which reports that in the year of the Covid-19 outbreak hotel values saw average declines of between five and 15 per cent compared with the previous year.
Last year followed a decade of hotel value rises across Europe, with 2019 posting an average three per cent increase – with some properties in southern Europe experiencine seven per cent rises.
However, widespread lockdowns in 2020 which resulted in the majority of Europe’s hotel’s closing for business, saw annual RevPAR fall by around 70 per cent compared to that of 2019.
“The impact of the pandemic on cash flows and profits has been dramatic, although government support and payroll subsidies helped to soften the blow.
“All tiers of hotel have been affected but particularly the upscale and luxury properties as they tend to be more exposed to group and convention demand as well as international visitors,” commented