Hotel sales recorded in 2020 made up just 35% of the levels from the year prior, according to HTL Property as the company predicts a stronger year in 2021.
Transactions exceeded AUD$2 billion in 2019 and hit only AUD$825 million in 2020, the company said, with COVID-19 and its resulting dip in investor confidence identified as a leading cause for the downturn.
However, the company said 2021 was showing signs of a rebound, with traditional investors still eager on accommodation and tourism assets in the Australasian and Asia-Pacific region. HTL Property said current owners looking to divest or recapitalise should consider live marketing campaigns as a way of addressing and engaging with new sources of capital.
“Given the International and Domestic travel restrictions imposed throughout 2020, it is thought-provoking to recognise that a comparatively not dissimilar percentage of Australian Hotels sold found their new homes within offshore capital sources when considering total sales for both 2019 and 2020,” said HTL Property Asia Pacific Managing Director, Andrew Jolliffe.
“Accordingly, the perforated 2020 period recorded an ‘offshore’ investor decrease of only 1% when compared to the previous 12 month period.
“Pleasingly, therefore, these statistics show that the challenging amalgam of CV-19 and resultant border closures haven’t discouraged international investment in Australia to the prima facie extent one might have otherwise ascribed. Hence, the deliberate drive to invest in the Australian Accommodation and Tourism market is as strong as ever; particularly given the still economically priced Australian dollar, attractiveness of local interest rates and confidence in the long term prospects for the sector,” he added.
“With regard [to] the patent new origins of capital entering the Australian hotel market, the demand for Accommodation acquisitions has increased with 43% of all sales in 2020 to first time investors in the hospitality market; indicating the clear magnetism for investors seeking yield in a stable, low interest rate environment,” added HTL Property Director, Nic Simarro.