Global hotel investments may fall 50pc: Broker

SINGAPORE: Global investment in hotels may fall by more than half to US$50 billion (US$1 = RM3.21) this year because of the credit crunch, Jones Lang LaSalle Inc said.

Real-estate financing has evaporated as defaults by US homeowners prompted more than US$379 billion of losses and asset writedowns at banks and securities firms worldwide. Demand for hotel properties has slumped after global deals surged to a record US$110 billion last year, said Arthur de Haast, chief executive officer of Jones Lang LaSalle Hotels.

"The main thing that will stimulate hotel investment is an improvement of liquidity in debt markets," de Haast said in an interview here yesterday.

Hotel investment fell to about US$8 billion in the first quarter of 2008, after exceeding US$20 billion a year earlier, Jones Lang LaSalle, the world's second-largest real-estate broker, said this month. The last time global hotel investment was below US$50 billion was in 2005 when transactions totalled US$47 billion, de Haast said.

Even as global hotel acquisitions slow, de Haast said he expects hotel deals in India to more than double to as much as US$1 billion this year, up from between US$380 million last year, he said.

Real-estate funds from private equity companies and sovereign wealth funds seek to tap India's growing domestic tourism market by acquiring hotels in the world's second most populous country, de Haast said.

By Bloomberg