Why invest in the hotel asset class
After being left to hotel specialists this asset class has seen a growing institutional demand over
the last few years. This has substantially improved liquidity thus further decreasing its risk profile.
Unlike any other asset class, hotels are trading assets where owners should understand the business of their tenant or operator as this impacts the asset value. This increases the barriers to entry but also supports returns.
Lower risk profile
Leases as well as management or franchise contracts are always signed on a long-term basis, on average for ca. 20 years. This allows investors to reduce their investments’ risk profile.
Despite short to mid term negative impacts such as economic crisis or pandemics, regions remain extremely connected and travel keeps its long-term growing trend.
With a lower risk profile than most other asset classes, and enhanced returns, the hotel asset class offers a very attractive risk-return for investors.