News & Stories

Munich. Hotel financing is an urgent subject for the industry. Who is still financing where, which way are the big players going, and under which criteria are they expanding at all? And how do established banks face up to the current funding shortfall? Last week at the Expo Real, the 11th dialogue of the hospitality industry shed light on many of these aspects in the detailed opening talk with seven experts from the hotel industry, classical and alternative financial world. The opinions, at least, those of investors and operators – Starwood Capital and Hyatt – were quite similar. The banks, Aareal and Deutsche Hypothekenbank, defined their criteria, and Siemens Financial Services presented a niche-financing model as a silver lining on the green horizon. One assessment specialist has only seen little change since 2008. The highlights in the summary.

Munich. Budget hotels are in the trend and so is travelling. Were it not for the problems there with financing. Now in times of the crisis, the scanty cash and loans as well as the rising meaning of social networks is also the trend of the subject "Crowdfunding" or "dream financing" through the masses of the Internet Community. Even popstar David Bowie had already financed the legal security of his songs in 1997: His fans "donated" millions to him. Now, the trend has also come into the hotel industry. It can be illustrated by the cool concepts in Amsterdam: A pilot project has currently sprung up there with the name "City-Hub". Hidden behind it is a modular system of the private sleeping units much like the Japanese sleeping boxes from which unused office buildings could be converted into budget hotels in the future. It is financed via Crowdfunding. In the USA, this alternative financing form is already established within many industries, in Europe it is still in its baby shoes.

Bad Doberan. Despite creditor meeting on Wednesday, still no decision on the future of the Grand Hotel Heiligendamm has been made public. Everything seems to be a matter of the sales price. In parallel, Anno August Jagdfeld now has a new problem.

Vienna. The private resort hotel industry of Austria is also concerned by the credit crunch. Now the industry association OEHV, along with partners, is offering a credit alternative for hotels. At the same time, the largest purchasing cooperative in Austria is assisting in financing.

Munich. Siemens Financial Services "goes green": Speaking at the Expo Real hotel conference "Hospitality Industry Dialogue" on Monday, October 8, 2012, the company will present a finance model for sustainable hospitality projects.

Augsburg. Securing finance is very difficult at the moment. This was underpinned by responses from the eleven consulting companies which hospitalityInside.com recently surveyed: What sort of finance is being granted, and what is not being granted? Does franchising have a chance for finance? And how much equity must investors today commit to projects of up to EUR 20 million, EUR 50 million or over EUR 100 million? Their answers show that framework conditions are now more difficult that ever. With this, there is certain to be lots to talk about at the Expo Real in Munich. Even the hotel conference there, the "Hospitality Industry Dialogue", will start with a two-hour discussion on this very subject. Each trade fair visitor can take an active part in the discussion.

Leonberg. What blunders do investors, tenants and banks commit in terms of finance? Quite large ones it seems, as a meeting with Antje Zumsande reveals, Managing Director of the consulting company Consilium Hotellerie in Leonberg near Stuttgart. Hotel real estate advisors like her see and hear a lot. General contractors, hoteliers, bankers, local politicians and planners include her in their plans and projects; come to her with their problems - and sometimes also with daring proposals or schemes. Five examples from real life show how "creative" the parties involved are when they want to reach their goals: From a defrauded franchisor, a greedy investor, a negligent bank, jumpy partners and a fiddling owner.

Wiesbaden. The scars of the financial crisis are deep and the hotel industry has been especially affected by the current funding shortfall. Without perfect preparation, nothing works anymore; however, many credit applicants have still make the same old mistakes. What is the industry doing wrong? Subsequently, consultants describe their observations and bankers their expectations. One side advises the hotel managers to examine their banks as carefully as the banks examine their borrowers. And hotel managers should not get their hopes up too high, despite complete documentation. On the other hand, the banks attest to a much higher degree of professionalism in the industry in the meantime.

Augsburg. The banks are no longer pursuing financing projects. They are continually adverse to risk and with this, are strangling an increasing amount of hotel projects. The equity ratio rises and rises, the lease leaves no opportunity to management and franchise. The projects that still seek financing are squeezed into a simple model of conditions. While central European financing suffers from Basel III, the euro discussion brings international investors to hesitation. hospitalityInside.com has questioned eleven well-known consulting and broker companies on how they see the current financing situation in the central European hotel industry. Seldom are the appraisals of experts so closely together – and laying negatively in this trend.

Munich. The national implementation of the European Directive on Alternative Investment Fund Managers could have a fundamentally negative effect on the German real estate and financial industry. The industry associations are fighting against this draft as not all funds are as bad as consumer protectors and politicians think they are. Many of them, among them hotel funds, paid off well for the investors. Even banks do not understand why open-ended funds should be prohibited. An interim result with respect to the AIFM Directive, and the associations' and consumer protectors' major points of criticism.