Real estate industry is looking for new asset classes characterised by a different risk-return profile with respect to standard classes (offices, retail, residential, etc…) and the hotel industry represents a new asset class where the real estate funds are looking for new investment opportunities. The performance analysis of the hotel industry shows that hospitality assets perform differently than other real estate asset classes and significant differences are detected based on the location and the quality standard of the hotel structure. The performance in the hotel industry is significantly affected by the hotel reputation and its capability to maximize the RevPAR (through the optimization of the ADR and Occupancy rate) of the hospitality infrastructure. The performance drivers of this asset class are not comparable to other types of real estate, as the skills and information needed to evaluate the investment opportunities in the hospitality industry are unique and not frequently available for fund managers operating in other real estate segments. Literature on the diversification strategies in the hotel industry is still limited and there is scarce evidence outside the US about the performance of real estate portfolios specialised in the hotel industry. This paper analyses the Italian industry and provides evidence on the performance achieved by the opportunities related to the hotel industry by considering the case study methodology. The results highlight that the performance of the hotel industry is different than other real estate asset classes and the portfolio composition criteria normally adopted for specialised real estate funds are unique and focused prevalently on the revenues forecast and the rent sustainability.
No abstract
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