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Terra Firma Capital
San Francisco Bay
2016 Olympic Games
The world's highly mobile and rich population guarantees that luxury hotels will always be a lucrative property investment. However, hoteliers can't expect to demand top dollar if they don't have the perfect property in the right location. But what makes a spot perfect for a hotel investment?Ultimately, it is a combination of economics, politics, attractions, climate and access to luxury. Here is a rundown of the top ten locations to invest.
You can't have a list about luxury without mentioning London. The city continues to attract the wealthy year after year. Whether for business or pleasure, travellers flock to the capital's hotels and STR Global and Tourism Economics predicts that 2013 will see the sector grow. Supply is forecast to rise by 3.5 per cent and demand will increase by 2.9 per cent.As the ranks of wealthy continue to grow across the globe, Knight Frank is confident that London will continue to be one the main destinations for the rich - at least until 2023 when Asian markets begin to gain ground.
"It is important to bear in mind that only 20 per cent of Monaco’s 35,000 residents are Monégasque, which underlines the scale of foreign interest in the principality," Knight Frank wrote in it's 2012 Monaco Insight Report. The country is certainly popular with overseas investors and renowned for its undeniable glamour, meaning it is likely to continue to draw the wealthy from across the globe.
Russia's middle class is growing, meaning the country's economic position is also strengthening. As the former Soviet state goes from strength to strength, it is likely to become a city to watch.Domestic interest is already increasing and, while the climate isn't going to be drawing in sun seekers anytime soon, it is undoubtedly a city of historical, political and economic interest.
San Francisco is one of the most popular US destinations and in 2012 the city enjoyed the greatest room rate increase in the country, with rises reaching almost 11 per cent. San Jose and Oakland were just two areas increasing their footfall, enjoying nine per cent increases year-on-year, STR told USA Today. Known for their cheaper prices, the localities are prime for investment in more luxury developments.
No one can deny Asia's ascension in the world and, according to Knight Frank's Wealth Report, it has an important role to play. "Beijing is the centre of power, but Hong Kong’s global intermediary role is critical," they stated. Consequently, it is an administrative region of great significance, attracting people of power and a considerable number of business travellers. With Asia on an upwards trajectory, now is certainly the ideal time to invest in luxury hotel assets in the region.
While Thailand may not be famed for its economic prowess, it is one of the most popular holiday destinations in the world for its beautiful scenery and pleasing climate. The rich and famous like a holiday as much as the next person and Bangkok is a great tourism hub in the region and a gateway to Asia - ideal for a luxury hotel.
While most of Europe has been stuck on a downward spiral, Turkey has emerged as a region to watch. This can be seen in the growth of its property market and in June 2012 the country was named as having the fastest growing property sector in the world, even overtaking China. The pleasing climate is also attracting tourists and Istanbul is a great centre for investors to capture both leisure and business tourists.
Brazil is one of the world's strongest emerging economies and, as the host of the 2016 Olympic Games, it has the eyes of the world watching its every move. Investors haven't failed to notice the potential of the country and research from Ernst and Young Terco has shown that foreign property investment in the country now stands at between GBP 1.5 billion and GBP 3 billion. With Rio the obvious choice among buyers, better deals will likely be found in Sao Paulo, a city that is proving it has both business and tourism clout.
Indonesia is proving to be a resilient nation, with the country expanding 6.4 per cent year-on-year in the second quarter of 2012. This is thanks to a rising number of investors choosing the country to grow its asset portfolio. As arguably the heart of the reason, Jakarta is proving itself to be a particularly attractive spot. The hotel market in the city recorded positive results across all three performance metrics in 2012, according to Knight Frank.
Dov Meyer, chief executive of Toronto-based Terra Firma Capital Corp and a partner in the Hilton's Waldorf Project in Jerusalem, told Skift in February: "We know the tourism market in Israel, especially in Jerusalem, is very cyclical [and] is very sensitive to the security situation. Developing in Israel is a long-term project, you don’t make decisions on a dime, and when the market is good here it’s very, very good."At the moment, it seems it is "very, very good" and as travellers get more adventurous, luxury brands will also need to enter these previously unexplored markets.
Learn more about investing in hotels: Read More
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*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.