European Hotel Property Values Fell Less Than Those in U.S. Despite a Worse Pandemic

Hoteliers and hotel workers in major cities across Europe continue to struggle amid another wave of lockdowns and rising coronavirus case counts. Occupancy rates in major European economies pale in comparison to those in the U.S. But hotel valuations are another story. European hotel values fell by as much as 15 percent last year, according to hotel consulting firm HVS. While a significant drop, the decline is less than in the U.S., where currently occupancy rates are much higher than in Europe but hotel valuations fell by as much as 30 percent. “Everyone was waiting for something like a 30 percent drop in values to happen in Europe, but there’s been so much support from the government and lenders,” said Sophie Perret, senior director of HVS London. “That’s helped prevent the cash burn as much as possible.” A combination of limited hotel supply pre-pandemic, high cost and approval barriers to enter and develop in certain markets, and more targeted aid packages to the ho