This year is set to be "a big year" for mergers and acquisitions in the hotel sector, with increased rationalisation of corporate roomstock easing last year's lack of supply.
That was the view of property agent Christie & Co's managing director Chris Day, speaking at the launch of the company's Business Outlook 2004 report last week.
Day predicted that Hilton, InterContinental, Accor and Groupe Envergure would all put up for sale several hotels that did not fit their portfolios.
Independent hoteliers are the favourites to snap up the properties, with US-style real estate investment funds also likely to show an interest. Barring any worldwide catastrophic events, Day said, property values would increase by double digits in 2004, following on from last year's growth rate of 11.5%.
Christie & Co also predicted that hotel companies would continue to move away from owning properties, favouring operating agreements instead.
Sale-and-leaseback deals, however, are likely to be replaced by sale-and-management contracts, as new international accounting standards coming into force in 2005 make leasing less profitable.
Growth of the budget and boutique hotel sectors will continue, with smaller hotel companies hoping to emulate the success of niche groups such as Hotel du Vin, added Day.
Source: Caterer & Hotelkeeper, 15 - 21 January 2004