European Hotel Valuation Index 2005

HVS London has released the latest edition of its annual review of European hotel value trends, the Hotel Valuation Index (HVI).
HVS International's London Office has today released the latest edition of its annual review of European hotel value trends, the Hotel Valuation Index (HVI). The European HVI has tracked trends in hotel values in key regional markets since 1993. The survey covers upscale hotels in 28 gateway and other major cities across the continent. Our 2005 survey highlights the following trends:
  • The HVI 2005 shows that hotel values increased on average by over 3% across Europe in 2004 compared with a decrease of over 4% in 2003, a decrease of 1.5% in 2002, a decrease of almost 2% in 2001 and an increase of 11% in 2000, 4% in 1999 and 6% in 1998. In this year's HVI, hotels in 20 of the 28 markets surveyed experienced an increase in value, with five markets experiencing double-figure growth.
  • Only four markets recorded growth in 2003;
  • After a two-year absence London has overthrown Paris to regain its position at the top of the 28 HVI markets surveyed, claiming the highest value per room. On average, hotels in London in 2004 were valued at €481,000 per room (compared with €430,000 in 2003), followed by Paris with €455,000 per room (up from €436,000 in 2003) and Milan with €412,000 (compared with €426,000 in 2003);
  • In addition to London, Paris and Milan, hotels in Zürich, Geneva, Rome, Edinburgh, Amsterdam, Prague and Munich also claim values per room that are above the European average of €222,000 per room. At the lower end of the scale, Istanbul has gained a notch, leaving Warsaw at the bottom, with values per room averaging €97,000 in 2004, down from €112,000 in 2003;
  • In contrast to 2003, the majority of the European markets surveyed experienced an increase in revenue per available room (RevPAR), which was mainly led by an increase in occupancy. However, in many cities average room rates remained under pressure and approximately half of the markets experienced a decline;
  • The generally improving performance during 2004 can be attributed mainly to an improvement in the European economy and the absence of any new, significant worldwide events affecting demand over the course of 2004. Visitor numbers are improving and Americans are increasingly travelling again, even to Paris. However, the strength of the euro is making Europe a more expensive destination, especially for US visitors and for countries whose currency is linked to the US dollar.
Copies of the HVI 2005 report are available free of charge from HVS International, 14 Hallam Street, London W1W 6JG, its website:, or via e-mail: simply send an e-mail to or to noting 'HVI 2005' in the reference/subject box. For further information please contact: Karen Smith, Associate Director Tel: +44 20 7878 7729 Mobile: +44 7866 413 318 Email: Katerina Giannouka, Associate Tel: +44 20 7878 7705 Mobile: +44 7903 457 607 Email: Russell Kett, Managing Director Tel: +44 20 7878 7701 Mobile: +44 7802 411 142 Email: Or by fax on +44 20 7436 3386 HVS International is a global consulting and services organisation focused on the hotel, timeshare, gaming, restaurant and leisure industries. With an office in London since the early 1990s, HVS International offers consulting and valuation services, investment services (including brokerage) through HVS Hodges Ward Elliott, European hotel financing services, asset management and executive search to clients with interests in the United Kingdom and throughout Europe, the Middle East and Africa (EMEA). HVS International's London office has appraised more than 2,000 hotels or projects in 60 countries since its founding in 1990 in all of the major markets within the EMEA region. Many of our clients are leading hotel companies, banks, and hotel development and investment groups, and the firm is on the valuation panels of several of the leading international financial institutions with interests in financing hotels and portfolios.
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