With the current economic situation, many investors are looking for ways to protect their investments and hedge against inflation. One option that has been gaining in popularity is investing in hotels. While this may seem like an attractive option for core investors, the wider market needs to be aware that it may not be a wise choice during this period of inflationary pressure.
Andreas Löcher, head of department and investment management at Union Investment, has commented on the matter. He explained that core investment in hotels requires a bridging of the buyer-seller divide, and that higher interest rates do not make sense for core investors at the moment. This means that while the market remains volatile, more transactions will only occur if interest rates settle.
Jonathan Kellett, Head of European Real Estate Finance at IHS Markit also weighed in on the subject. He outlined the conditions necessary for core investors when considering hotel investment, including finding the right partner and brand. He stated that although hotels can be a good hedge against inflation in the current market, it’s important to find the right deals since the spectrum of investment is narrower.
Overall, it appears that hotel investments may not be the best option for investors during this period. While they may be a good hedge against inflation, the current market conditions make it difficult to make sound decisions. Core investors need to do their due diligence and ensure they have the right partner and brand before investing. For the wider market, it’s best to consider other options.