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stEam ahEad
Factors ranging from economic stimulus packages to reinvigorated investor interest are turning Europe into a growth target again .
by Oriana Lerner , contributing editor
Europe has been a blank on most hotel companies ’ development maps for much of the new millennium . The rationale was , why bother with the complexity of finding sites , leasebacks , difficult economies , employment regulations and more when there were low-hanging opportunities ripe for the taking in Asia and Africa ? However , some ripples of change in the United Kingdom and on the continent turned into a groundswell of strategic opportunities that look likely to put Europe back on developers ’ hot lists .
Stronger economic fundamentals in markets like Germany and the United Kingdom , more available capital from new investors and rising confidence in the real estate market have combined to heat up the region . “ Recovery has come at a velocity , especially in the U . K ., that few people expected ,” says Nick van Marken , global head – advisory , Travel , Hospitality & Leisure Industry Group , Deloitte , London . “ Investor confidence is soaring , so much so people are refinancing deals done six to 12 months ago .”
Gateways and beyond It ’ s not just about international gateways ; it ’ s about what happens when new money and brands ( both established and startups ) apply deal filters that scan the entire radar for niche plays that fit their specific goals . London is still a must-have market , for example , but there are new spins how to play it . “ It ’ s far from foolproof ,” says Thomas Smit , president , Waldeck Capital , Luxembourg . “ By 2016-17 the market could overheat across the country , but especially in London .”
However , the bigger news may be outside of the capital . Government programs such as the Business Premises Renovation Allowance and Local Enterprise Partnership have been ramped up to provide more tax incentives for hotel openings in the provinces , which , added to more attractive real estate values , has pushed the boundaries of the U . K . pipeline .
That story is being replicated across the continent . While gateway cities remain key targets , a look at the map for the giants is more of a peek at what the next hot spots will be . Hilton Worldwide just announced plans for a
www . hotelsmag . com October2014 HOTELS 45