About Luisa Russell
[email protected] +44 (0) 20 7878 7758Luisa Russell is an Associate Director in the London office of HVS. She joined the company in 2011 after completing her Bachelor of Science in International Hospitality Management at Ecole hoteliere de Lausanne, Switzerland. Since joining HVS, Luisa has conducted various hotel valuations and feasibility studies throughout Europe and Africa. For further information, please contact:
Excellent . Very useful and indicative research . Keep on the good work.
Thank you Joseph for your kind words. Please feel free to browse in our HVS library where you will hopefully find other interesting articles.
Well done ladies, good article! Would be nice to keep this going and have you consider a follow up article on cross border lending practices by German banks. Kind regards and happy holidays, Bernard
Dear Bernard - thanks for your encouragement. Great idea regarding German cross-border lending. We will look into this in the New Year. Arlett
Interesting and well researched article! I have not heard of a lot of lending for Management Contracts over the last 12 months - at least not for the typical international management agreements with little to no hard guarantee and little equity participation which is the norm in Germany. You rightly say that the German Market is still dominated by leases. The German market is as well dominated by tenant-operators under a international brand (mainly new build or conversions), especially in the budget to midmarket field. The indirect security requirements by the lending bank from the investors tenant are in many cases on a level that makes signing a lease agreement unattractive to the operator. This goes as well for institutional investors. Secondary markets are often seen as fare more attractive to operators and investors than primary markets due to higher demand, lower land prices and less competition. This seems to be seen differently by lenders. This is one reason while you still see only a limited number of franchised hotel operations in Germany, compared to other markets. On the other hand loans are very often replaced by private equity either just on the investor side or in form of owner-operators. For franchise tenant-operators it makes more sense to co-invest into one property instead of putting up the required bank guarantees for several leased projects. Overall this slows down development significantly. Interesting as well that Re-usability still plays an important role in decsion making. Over the last 20 years I have not seen a significant number (in fact I do not remember a single one) of purpose and quality build branded hotels in Germany which have been turned into something else incase of insolvency of owner or tenant - operator. Thanks for all your intersting articles and looking forward to more in the new year! Georg
Georg - thanks for your feedback and sharing your personal experience/insight of the market.