While hotel investments are slowing down, the post-Covid tourism recovery is proceeding at a pace exceeding all expectations: an apparent paradox that can be explained by the simultaneous rise in inflation, which pushes up interest rates, convincing investors to adopt a wait-and-see attitude. But a reversal seems to be looming.
And it could be brought about by another apparent paradox: the global economic slowdown predicted by many analysts (-0.4% and -0.3% are the estimates for the fourth quarter in the US and the eurozone, according to an Anima sgr processing of Haver Analytics data. Ed.)"The big surprise of 2022 was the sustained growth of the economy, especially in Italy,- says Fabio Fois, head of investment research at Anima. – This was unexpected but certainly positive, though it clearly left the central banks alone to fight rising inflation. And so interest rates inevitably went up.” This means that a moderate slowdown could actually be good news for real estate investments, hotel transactions included, as it could stop inflation from getting out of hand and help bring credit costs down to acceptable levels for transactions that often require significant amounts of leverage.
“In both the US and Europe,- warns Fois, - asset price growth indices have already retraced to pre-Covid levels, though there is still pressure on service prices despite falling energy costs.”
An eventual economic slowdown, he added, would wipe out the empathy factor that is preventing inflation from falling at the desired pace.
