Wherever the journey takes you - Part 2

Wohin die Reise geht - Teil 2

Megatrends and the hotel industry (2)

In the first part of our analysis for the 2020s, we questioned megatrends relevant to the hotel industry in the field of city hotels. The second part is about what is going on in tourism destinations. Since business travelers hardly play a role in holiday hotels, the situation is different. However, the trends mentioned in Part I also have an impact on product, service and financing.

Holiday hotel industry with creative ideas

n the holiday hotel industry, the demand of guests for quality increase in all areas. This requires a lot of empathy in individual needs, such as e.g. special experiences that can ideally be shared with others via social networks. Creative ideas for conception, operation and marketing are just as much in demand as the financial means necessary for implementation. Here the tough competition is likely to further widen the gap between success and failure. Replaceable bed castles have largely had their days, even if the guests are of course still looking at the price. The comparison at the mouse-click intensifies the competition.

It is therefore particularly important that the house and host treat the guest with an incomparable profile. The best way to do this is with the instrument of individual storytelling, which tells a credible story in marketing communication but also in the furnishings and offers of the company. Authenticity is the key here. However, the topic of “wellness” has reached its zenith after 30 years. Sustainability and health aspects are much more attractive, which are shown in many small details and appeal to those interested.

A key criterion for success is also the binding of the choosy and quite experimental guests to the respective house. This can only be achieved through permanent communication with the guest or even through their participation. The noble hotel-resort Weissenhaus is one of the pioneers here in Germany. In several financing rounds, investors and guests were able to participate in the hotel project through an investment company. In addition to the return, they also receive corresponding discounts when booking. In addition to such crowd funding concepts, it can be observed that the alternative accommodation options "hotel rooms" and "vacation homes" are growing closer together due to new financing models. The guest can spend his vacation for a certain period of the year in his - individually secured - property investment. For the remaining time, the operating company takes over the marketing under a comprehensive contract. This usually also buffers the individual utilization risks of the individual investor.

Not everything that glitters is gold.

Hotel properties were considered exotic in real estate investments for a long time, but they are now finally in the spotlight of interest. No wonder: they now promise better returns than many office properties. And in residential real estate people are now talking very blisteringly. In addition politicians are also unsettling investors and project developers through questionable legislative measures, which have a negative impact on new projects, especially in Berlin.

With hotels, the demand situation of customers willing to pay descent prices is in plan. Here the market still seems unaffected. However, one should take a very close look at the objects in the hotel boom. Core locations are recommendable, but are hardly available anymore with attractive returns, as demand is already priced in here. On the other hand, it is worth taking a look at the secondary cities around metropolises. They are also increasingly being discovered by tourists. Luxury hotels are generally only of interest to investors if one can realize sales profits through a quick exit. They are less suitable for a long-term and profitable "carefree investment".

In the budget area, on the other hand, there is still room for improvement due to the growing international demand for simple accommodation. Because of the confusion and the current dynamics of the very special hotel property market, we strongly recommend to get detailed advice. With HOTELINVEST you can be sure to be at the right place. And with the following offers we may have the right investment opportunities for your investment strategy:

City Hotels

City: Kassel / Germany
Location: Top 1A in the city center
Project: new Business-/Budget Hotel with 3 stars
Ground: about 1.900 qm
Living area planned: about 5.500 qm incl. underground parking
Amount of rooms: about 150
Purchase price: about EUR 18 Mio. for the turn-key hotel
Info: the new hotel can be bought with or without tenant

City: Frankfurt / Germany
Location: City center
Object: 3 star business-hotel
Land: about 2.944 qm
Amount of rooms: more than 110
Purchase price: EUR 15,5 Mio.
Yield: 5,5 % p.a. guaranteed with longterm lease-contract

City: Vienna / Austria
Location: good location the 20. district;
Object: Office-and business building (lease-income EUR 317.000.- p.a.)
Project: new building for use as hotel or residential living
Size of the new bulding: about 110 rooms for hotel  or about  3.300 qm living space for residential
Purchase price: EUR 7,5 Mio. 

Holiday hotels and resorts

Resort: Bad Gastein
Info about resort: www.gastein.com
Location: Top 1A in the village center
Project: New holiday resort in the 4-5 star segment
Land: about 3.133 qm
Living space net: about 7.937 qm
Amount of rooms: about 80 rooms and suites
Purchase price: EUR 3,5 Mio. for the land including all construction plans

Resort: Bad Tatzmannsdorf
Info about resort: bad.tatzmannsdorf.at
Location: Top 1 A in the village center
Object: 4 star family-hotel
Land: about 3.333 qm
Amount of rooms: about 50
Purchase price: EUR 4,5 Mio.

Resort: Hinterstoder
Info about resort: www.urlaubsregion-pyhrn-priel.at
Location: Top 1 A in the vilage center
Object: 4 star holidayhotel
Land: 2.464 m2
Amount of rooms: ca. 27
Purchase price: only EUR 1,8 Mio.

Resort: Welsberg in South Tyrol / Italy
Info about resort: www.kronplatz.com and www.pustertal.org
Location: sunnig and quiet
Object: New 3 star holiday-hotel
Land: about 2.050 qm
Amount of rooms: about 32
Purchase price: EUR 4,4 Mio.