In the hospitality industry, development and growth are strong once again. Russell Kett of HVS discusses how developers are confidently seek equity.
Positive industry development
All the pointers are up. Everybody’s excited. Investors are excited. The banks are here in droves. There are people here with developments to try and get people interested in and they’re even getting a good hearing. The operators are buoyant. In my business, we are really based around two types of deals. One is that we have a business which actively sells hotels. And the other side of our business is the advisory side, whether we’re doing some valuations of hotels, we’re dong feasibility studies for new hotels, strategic advice and so forth. So on our agency side we’ve been hugely busy selling peoples’ assets and that side of our business which is called
HVS Hodges Ward Elliott. We’re obviously known as valuers and we value hundreds of hotels every year, even out of the London office alone. But what’s perhaps been more surprising in the past 12 months is how many people have come to us with feasibility studies that need to be done. So that’s encouraging in the sense that the new development market is picking up fast. And they are hiring us on the basis that they feel confident that they’re going to get funding, they’ve either got equity behind them or they’re confident of getting it. Some people are using our work to help them to find the debt and they’re confident of getting the debt before they’re even hiring us. So I think that’s an encouraging sign of the industry that that side of the business is on a more upward trend. We’re also getting more involved in helping companies determine their strategy for the future, how they should be growing and maybe how their brand should be developing and so forth. And again that’s encouraging, people are putting behind the sort of batten down the hatches, get our costs down, you know, keep surviving at all costs to saying, well now let’s look to the future, let’s look to how we can grow, how we can expand and so forth.
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