Rising Interest Rates Are Scrambling Hotel Deal Calculations
Skift Take
Baron Ah Moo works for PKF Hospitality and is a former hotel CEO. So he's well-connected among private equity firms and other dealmakers. Here's what they're telling him now.
Early Check-In
Editor’s Note: Skift Senior Hospitality Editor Sean O’Neill brings readers exclusive reporting and insights into hotel deals and development, and how those trends are making an impact across the travel industry.Many investors are nervous about today's stormy market. So what's the smart money doing?
Someone who speaks regularly with a cross-section of hotel investors worldwide is Baron Ah Moo.
Ah Moo leads the U.S.-based consulting practice for PKF, a full-service, global hospitality advisory group that's based in Vienna, Austria.He previously advised on real estate for Colliers International and Lewis Fund Holdings, one of the UK's largest family offices.He was also CEO of Indochina Hotels and Resorts, which had a half-billion dollars in leisure real estate assets under management at the time.Here's the state of play in U.S. hotel deals — what's in and what's out.
Many investors waited for hotel pricing to bottom out during the pandemic. But government subsidies artificially floated the market and the expected industry-wide "black swan" event never materialized. Now they're desperate to place capital, but they're wary of a market that's become turbulent with rising inflation and interest rates."Though destination resorts remain hot, the growth in leisure demand will peak this summer," Ah Moo predicted. Glamping has more room to run, he said. (Surprise!)Equity memberships/fractional/vacation ownership —specifically in response to demand from investors in developing market countries for projects often elsewhere — is also more attractive than some other areas of hospitality investment right now, Ah Moo said.A
