Real Estate: How to Invest in the Hotel Industry?

At the end of the year, the French hotel industry organizes itself in a festive atmosphere to welcome customers. But in France, tourist activity is almost constant, with holidays and professional, cultural and sporting events. After the health crisis, “Tourist attendance quickly returned to 2019 levels, the reporting year that was the peak of activity.”Johanna Capoan, deputy director and head of the hotel division of the management company Swiss Life AM Europe, notes.

After 2023, which must be recorded in the activity record, “2024 and beyond still looks promising”, According to Pierre Dupuy-Chaignaud, associate director of the company 123 IM responsible tourism department. In addition to being a world-famous destination, Paris will host the Summer Olympics in seven months.

Almost 16 million visitors are expected, and Ile-de-France has only 160,000 hotel rooms. With rates already on the rise and occupancy rates saturated, the horizon is looming. “It’s a real estate segment that’s doing remarkably well compared to office and residential.”Eternam Deputy General Manager Jonathan Donio clarifies.

Hotel real estate, well-known to institutional investors, is less well-known and also available to individuals. Nevertheless, it is important to see rare entrance doors.

Three specialized SCPI

First is real estate crowdfunding. From time to time, files about the acquisition of hotels appear in the market. The risk here is high because performance is based on the success of a single operation. The recently launched Wally platform aims to democratize hotel investment, offering entry tickets from €10. “The first financed purchase concerned an operating hotel in Toulouse. Annual returns are expected to be between 10% and 13%, distributed quarterly to investors. Other files are being studied in Lille, Lourdes and Marseille »points out Nathan Zappel, president and co-founder of this site.

Another narrow access route leads to real estate investment companies (SCPI). Only three establishments play the hotel and more broadly accommodation card: Atream Hôtels, Aestiam Cap’Hébergimmo and Logipierre 3.

Their respective 2022 yields of 5.05%, 5% and 5.31% are higher than the sector average of 4.53%, according to the French Association of Real Estate Investment Companies. “We invest in two- to four-star hotels and luxury outdoor hotels in France and Northern Europe. Rents are priced because they are indexed to inflation. In 2024, the turnover of our addresses should increase even more »points out Pascal Savar, president of the management company Atream.