The hospitality industry is washing its hands: where to invest in 2020? /Habr
All over the world this year has been unusually rich in unprecedented situations. The tourism and hospitality sector was in a difficult position and the number of questions only goes to the plateau in obtaining answers. Is it worth the investor to take a wait-and-see attitude or is it time to act now?
The crisis opens up new opportunities, and if you pay attention to Europe, then Germany traditionally looks the most stable, wealthy and at the same time more accessible to enter the market compared to neighboring Austria and Switzerland.
In both regular tourism and business trips, the first time in post-Covid times will be the most active local demand.
The Germans traveled a lot inside the country and in ordinary times. The structure of tourism demand in Germany looked the most balanced and differentiated: in the six largest destinations, more than 50% of the demand came from local tourists. Due to current restrictions on cross-border movements, this indicator will continue and will tend to increase. Even with a favorable scenario, it is assumed that most of the population will not travel far this year. Thus, the German market is in a favorable position from the point of view of recovery, since hotel loading can be adequately provided domestically.
Despite the fact that the current crisis in the industry overshadows all the previous ones, the hotel sector is still a promising one. China is ahead of everyone in overcoming the epidemic, is witnessing an increase in tourist activity and a steady recovery in hotel loading.
Rates for accommodation may temporarily drop to 25-35%. At the same time, 3-4 * hotels with the optimal ratio of price, quality and service with guaranteeing compliance with all quality and safety standards will be the most popular. Hygiene and all processes related to this topic (check-in /check-out, room cleaning, catering and others) will be key issues for the coming months.
Germany ranks first in terms of hygiene standards. She also suffered from a pandemic, but the country has a low mortality rate and one of the highest per capita testing rates.
These factors can affect the views of banks regarding the financing of facilities. An investor should pay attention to finding a good operator who will arrange a bank and be able to effectively manage the asset at such a time.
Response to uncertainty 3-3-370.
There is caution in the retail and office sector. The trend for remote work has been brewing for a long time in parallel with the development of communication technologies that allow you to work efficiently from anywhere. The coronavirus pandemic acted as a catalyst for these processes. Currently, in many areas of business activity, increased attention is paid to health, well-being and productivity, rather than being physically in the office. This leads to the desire to reduce the cost of renting office space in a number of categories.
In retail, online shopping is intensifying, which also leads to a change in the behavior of retailers. In the industry, supply chains are being degraded to reduce risks. Against the backdrop of these factors, the hotel segment does not look so unstable at a time when investors are turning in the direction of protected assets and sectors. But given the following:
1. Stability of income: a minimum number of changes in contractual obligations reduces risks.
2. Criticality of operations: the more important the facility and rent for income and business operations, the more attractive it is and favors important logistics assets.
3. The lower the density of people, the lower the operational risk of infection.
If the virus is contained in a relatively short time and the situation stabilizes, in the second half of the year investors will have more clarity. We all have witnessed increased volatility in the stock and commodity markets. Real estate traditionally offers relatively good returns compared to other types of assets. At the same time, the impact of COVID-19 can be regarded as positive in view of the unique opportunity to buy excellent (and rare) assets at a better price.
[b] Deferred demand and flexible stability 3-3-3357.
If you don’t feel like risking and investing all your money in one real estate, buying an apartment can be a profitable investment to place part of the capital. But there are features too. Direction for student apartments may suffer serious losses if communication between countries continues to be limited. For example, students from Asian countries may stop coming to study in Germany, making up a significant share of tenants.
However, there are solutions here, and those who are flexible will have the most advantages. One of the operators concludes agreements according to the scheme, renting micro-apartments as ordinary housing, concluding agreements for at least 6 months. A number of apartments introduced a new condition: the cancellation right from 30 days was reduced to 1? prices decreased by 20-25% and the conditions for the minimum number of nights when booking.
One of the investment groups intends to invest only in housing with long-term contracts; projects with the Shortstay concept are not planned to be considered in the near future.
There is a German network of service apartments that successfully combines both directions - longstay - shortstay and is optimistic about the future: in 202? two objects will open in Frankfurt and Cologne, in 2022 - one in Dresden. There is also a desire to maximize the introduction of contactless services with online registration, online payment, etc.
Hybrid contracts and the benefits of multifunctional assets will be advantageous: when the object is not only a hotel as such, but also combines modern negotiation spaces for tenants, the introduction of innovative standards in catering, and other ideas.
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