The Numbers Behind Private Equity’s Love Affair With Hotels
Private equity firm Oaktree Capital Management bought the Fairmont Hotel in San Francisco for $200 million in May 2012 Yorick_R / Flickr
Hotels have lately been the most profitable sector of the tourism industry, and private equity firms are making the most of their ability to take advantage of that profitability.
Excerpt from Forbes
The leveraged buyout industry can’t seem to get enough of the risky lodging industry acquiring over 30 hotels and resorts since 2000 with a total deal value of over $80 billion. Blackstone, Apollo, Starwood Capital and Oaktree are among some of the biggest buyers of the last decade.
Why all the PE love for hotels? Compared with REITs, private equity firms have more buying power and risk tolerance in volatile environments…Private equity firms also like that they can be hands-on as hotel owners; they can revamp operations, bring in new management and invest heavily in renovations at times others can’t afford to.
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