Business Day (Johannesburg)
Julius Baumann
5 November 2009
Johannesburg — GLOBAL investment in the hospitality industry had crashed from 127bn in 2007 to less than 2bn in the first quarter of this year, Arthur de Haast, global CEO of hotel advisory group Jones Lang laSalle Hotels said yesterday.
De Haast told delegates at third Hospitality Investment Conference Africa in Sandton yesterday that the lack of available finance was the reason for the drop.
Jones Lang laSalle Hotels tracks all hotel transactions of more than 10m. "In 2007, if you had an investment of more than 100m, we could have lined up 40 banks to finance that transaction. In early 2009 we could have lined up maybe four or five banks who after three weeks of unanswered phone calls would perhaps consider financing that sort of deal," said De Haast.
However, he said there were signs of recovery, with a little more than 3bn in investments secured in the third quarter of this year, led mainly by the Asia -Pacific region.
De Haast said while private equity companies did most of the hotel acquisitions in 2007, high net worth individuals, who were more willing to risk their own money, where leading the charge this year.
Kurt Ritter, CEO of the Rezidor Hotel Group, said the group was focusing much of its attention on Africa, where demand still outstripped supply. "There are still old hotels in some cities where I would not put up my dog or my mother-in- law. There is still a huge demand for more hotels on the continent."
Ritter said he had told his board that rather than grapple with the moribund debt markets in Europe, it would be better to invest in Africa.
Rezidor has dozens of hotels under construction across the continent where a second Radisson Blu is under construction in Sandton and the Radisson Blu in Port Elizabeth opened its doors this week.
"There is no doubt more investment is needed in southern Africa and in the rest of the continent", said Mmatšatši Marobe, CEO of the Tourism Business Council of SA, conveners of the conference.
Be the first to Write a Comment!
Copyright © 2009 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com).
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
