Case Studies - Christie + Co

International
Business Outlook
2012

Contents
International Managing Director’s overview 04
Services throughout the hotel life-cycle 05
International offices 07
Austria and Central and Eastern Europe 09
France 10
About Christie + Co
Christie + Co is the pre-eminent
hotel property adviser, employing
a team of specialist agents and
advisers across a network of 25
offices. We pride ourselves on
our ability to respond rapidly to
requests for honest, reliable advice.
Christie + Co is regulated by RICS
and employs registered valuers
and specialist chartered surveyors
across the business.
Germany 12
Middle East and North Africa 14
The Nordic Region, Russia and the Baltic States 16
Spain 18
+ We specialise in the hotel sector and can
always be relied upon to provide advice
that’s honest, credible and dependable.
+ We’re approachable, straightforward
and always deliver tailored solutions to
suit clients’ needs.
+ We understand what’s happening at
a market-specific level — we inspect
around 3,000 hotel businesses for sale
or valuation purposes each year.
+ We employ both property experts
and sector specialists with practical
operational experience, so our advisory
teams are well placed to provide
reliable advice.
+ We are regulated by the Royal
Institution of Chartered Surveyors and
complete more than 2,500 “Red Book”
valuations each year.
+ Our extensive network of offices
enables us to undertake large portfolio
and cross-border projects and meet
demanding timescales.
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International Business Outlook 2012
Chris Day
International Managing Director
“ Anyone who seeks professional advice needs to be
confident that the guidance they receive is informative
and reliable. At Christie + Co, we are always mindful of
the need to provide services that meet clients’ needs and
reflect the market conditions. Our experts fully understand
how hospitality businesses operate and are well placed to
provide practical solutions.”
4
Our services
Christie + Co offers a comprehensive
range of services including:
+ Valuations for a variety of purposes
including loan security, company
accounts, mergers and acquisitions
and apportionments.
+ Market and feasibility studies,
development advice and operator
search and selection.
+ Disposal advice and brokerage.
+ Property advice on leases, management
contracts and rent reviews.
+ Arbitration, dispute resolution
and expert witness advice.
+ Advice related to distressed
assets and the identification
of business recovery solutions.
+ Performance benchmarking and advice
on non-performing assets.

Services throughout
the hotel life-cycle
Christie + Co offers a comprehensive range of services
to support hotel businesses throughout their life-cycle.
+ Advice to debt providers
+ The identification of business
recovery solutions
+ Valuation for marketing purposes
+ Preparation of sales memoranda
+ Disposal advice and brokerage
+ Rent reviews
+ Arbitration, dispute resolution
and expert witness advice
+ Litigation support
+ Capex appraisal
+ Valuation for accounting purposes
+ Loan security valuations
+ Advice relating to non-performing
or distressed assets
+ Opportunity identification
+ Market, feasibility and impact studies
+ Deal origination and buy-side advice
+ Site sourcing and development deals
+ Operator search and selection
+ Forward sales
+ Valuation for acquisition purposes
+ Commercial due diligence
+ Acquisition brokerage
+ Strategic and business advice
+ Performance analysis and benchmarking
+ Operational reviews
+ Management contract and lease advice
5

International Business Outlook 2012
Jeremy Hill
Director and Head of Hotels
“ We have built a strong team of in-country
professionals to provide our clients with
the advice and support they need. In a
challenging market it is important to take
a realistic approach and seek the most
informed guidance. That’s why our clients
can always count on Christie + Co to
provide advice that’s pragmatic, honest
and credible.”
6
Andreas Scriven
Director and Head of Consultancy
“ Advice that combines data and
research is readily available, but the
simple compilation and delivery of
information does not create maximum
value. Christie + Co’s international
consultants focus on delivering
bespoke, implementable solutions that
create, retain, or recover value for
our clients.”

International offices
Barcelona
T: +34 (0) 93 343 6161
E: barcelona@christie.com
Berlin
T: +49 (0) 30 / 20 00 96-0
E: berlin@christie.com
Dubai
T: +971 (0) 4 434 8444
E: dubai@christie.com
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International offices
Helsinki
Berlin
Munich
Frankfurt
Paris
London
Rennes
Barcelona
Lyon
Marseille
Vienna
Dubai
1
2
3
4
5
6
7
8
9
J
K
L
Frankfurt
T: +49 (0) 69 / 90 74 57-0
E: frankfurt@christie.com
Helsinki
T: +358 (0) 9 4137 8500
E: helsinki@christie.com
London
T: +44 (0) 20 7227 0700
E: international@christie.com
Lyon
T: +33 (0) 4 72 91 30 50
E: lyon@christie.com
Marseille
T: +33 (0) 4 91 29 12 40
E: marseille@christie.com
Munich
T: +49 (0) 89 / 2 00 00 07-0
E: munich@christie.com
Paris
T: +33 (0) 1 53 96 72 72
E: paris@christie.com
Rennes
T: +33 (0) 2 99 59 83 30
E: rennes@christie.com
Vienna
T +43 (0) 1 / 8 90 53 57-0
E: vienna@christie.com
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International Business Outlook 2012
8
Austria and Central
and Eastern Europe
Middle East
and North Africa
France
The Nordic Region, Russia
and the Baltic States
Germany
Spain

Austria and Central
and Eastern Europe
Transaction volumes in the Austrian hotel
investment market increased in the first half
of 2011 to over ¤200 million. Some significant
transactions also took place in the third quarter.
Two major corporate portfolio transactions were
the primary contributors: one being the sale
of the 458-room InterContinental Vienna, sold
as part of a portfolio of seven hotels in Europe
by Morgan Stanley Real Estate to the Lebanese
businessman Toufic Aboukhater.
The sale of the NH hotels at Vienna Airport
and in Salzburg also contributed decisively,
along with a further three hotels in Germany,
which were sold by the Spanish hotel chain
NH Hoteles to Invesco Real Estate.
Individual transactions accounted for a lesser
share in the first half-year, dominated first and
foremost by the sale of two 4-star hotels in
Vienna. However, there were also two significant
individual transactions in the second half of the
year. In the first, Hypo Alpe-Adria-Bank AG sold
the Schlosshotel Velden at Lake Wörthersee
for an estimated price of ¤50 million to Karl
Wlaschek. The second saw the 140-room Hotel
Bristol (situated opposite the Vienna State Opera
House) sold to Elisabeth Gürtler, owner of the
renowned Hotel Sacher, in September.
Private equity companies are also returning to
the market, not just as vendors but as buyers
too. Moreover, high net worth individuals are
dominating the scene. Traditional institutional
investors, on the other hand, appeared more
reluctant to transact in the hotel sector in the
first half of the year.
In Central and Eastern Europe the hotel
transaction market developed far more
modestly in the majority of countries, with
a positive performance in only a few, most
notably Poland.
As in the rest of Europe, investors are
migrating to quality, looking for trophy assets
in good locations, at a reasonable price. For
the most part, major transactions tended to
satisfy these criteria.
The Four Seasons Gresham Palace in Budapest
was acquired in November by a sovereign
wealth fund from Oman. Similarly, the Radisson
Blu in Tallinn, Estonia was bought in the course
of a restructuring process by Event Hotels.
Other examples include the Le Méridien Bristol,
as well as the Sobiesky in Warsaw. The former
was sold by Orbis and Starman, and the latter
sold by Warimpex to the Norwegian high net
worth individual Lars Weenas.
With the increasing pressures faced by banks,
we expect further transactions in the Central and
Eastern European region in 2012. There will also
be, in our opinion, more transactions in Austria,
with Vienna leading the way. Many investors
remain on the hunt for attractive investment
opportunities in the Danube metropolis.
Lukas Hochedlinger
Director, Austria
Case Studies
Analysis of the Vienna, Salzburg
and Linz hotel markets
On behalf of the Austrian Hotel Association,
Christie + Co carried out an analysis of the
hotel markets in Vienna, Salzburg and Linz.
This included providing an understanding of the
historical development of supply and demand
in order to give a forecast for the future market
potential. A particular focus of the analysis was
on the possible consequences that additional
supply could have on occupancy rates and prices.
Valuation of two 5-star hotels
in Prague
The financing bank of two 5-star hotels
in the Czech capital of Prague instructed
Christie + Co to value both properties.
The valuation was prompted by strong
competition in Prague, due to new hotels
opening, coupled with a decline in demand.
Marketing of a 4-star seminar
hotel in the Greater Vienna area
Christie + Co was instructed by an insolvency
administrator to sell a seminar hotel in the
Greater Vienna area. The 4-star hotel has over
100 rooms, several conference rooms and a
restaurant, as well as a fitness room. Until
recently it was operated by an international
chain. Christie + Co is conducting the sale of the
hotel in a structured bidding process.
9

International Business Outlook 2012
France
Transactional market in progress
Since the final quarter of 2010, France
has experienced a real recovery in the
transactional market compared with the two
previous years. Although the economic crisis
is by no means over, the mid and corporate
markets both show optimistic signs. Hotel
transaction volumes were forecast to reach
¤2 billion by the end of 2011.
Corporate activity demonstrates
high demand
Significant corporate sales were realised in
2011. Major transactions included the Marriott
Champs Elysées for ¤240 million, the Louvre
Hotels Group portfolio of 33 hotels for ¤173
million (including refurbishment costs) and the
bricks and mortar sales of Accor hotels owned
by La Foncière de Murs for ¤133 million.
French assets, especially portfolios, continued
to attract institutional investors and
foreign funds in 2011. We believe this trend
demonstrates a revitalisation of the hospitality
sector in France.
Mid-market improvement
Over the first half of 2011, the number of
transactions below ¤10 million continued to
increase despite the wider economic problems
and restrictive modernisation programmes
imposed by French regulations.
Individual buyers retained a close eye on
profitable hotels and focused on properties
with 40 bedrooms or more. They also gave
priority to assets situated in the centre of
major cities such as Paris, Lille, Lyon and
Marseille. Properties with less than 30
10
bedrooms, located in outlying areas and
subject to seasonal demand fluctuations were
consequently neglected. These properties
represent about 54 per cent of the hotel stock
in France.
Profitability has become the top priority,
leaving less and less space for impulse
acquisition. The share of personal capital
involved is higher in most operations, unlike
the two previous years.
Busy year for the French
hotel industry
During the first half of 2011 the French market
proved to be one of the most dynamic thanks
to strengthening customer demand. As a
consequence of the ‘Arab Spring’, customers
sought ‘more reassuring’ European destinations.
Once again, visiting tourist numbers reached
a new peak in France in 2011 and the trading
performances of French hotels during the
year were excellent. The cumulative average
occupancy among all categories over the first
half of 2011 was 66.4 per cent (an increase of 3.6
points compared to June 2010) — a trend that
continued in the second half of the year.
The 4-star hotels took full advantage of the
recovery with an increase in their occupancy
rate of 4.3 points by the end of August 2011,
reaching an average of 73.4 per cent. The
recovery was felt in all hotel categories,
however, with increases of 2.2 points in
0/1-stars, 5.0 points in 2-stars and 2.6 points in
3-stars (source: veilleinfotourisme.fr).
Good financial health of the
French hotel market
On the whole, hotels in France in 2011
demonstrated their capacity to resist distress
in a context where anxiety prevailed. This
good health directly impacted on sale prices
and vendors drew maximum benefits from
their properties.
Investing in the French hotel industry presents
many advantages beyond the attractiveness of
the sector. Hotels are considered solid assets,
able to resist challenging times and economic
and financial crisis. Cities focusing on both
business and leisure tourism offer the best
investment opportunities.
Market orientation
With buyers’ interest increasing steadily,
Christie + Co’s team across France observed
that vendors did not feel pressured into selling
their properties. The investment capacity of
individual and institutional buyers remained solid.
Funding remained a problem, with traditional
buyers of larger units facing real difficulties in
financing projects exceeding ¤50 million. In a
tough environment, our consultancy services
added real value to investors’ and operators’
decision-making processes.
In conclusion
Hospitality is a dynamic bull market as far
as prices in France are concerned. The hotel
sector offers secure investments that remain
more profitable than other investment vehicles.
The market is steady and not affected by large
upward or downward variations. Therefore,
it retains its position as a favoured target of
individual and institutional investors.

Case Studies
3-star Turone Hotel
CAP117, a subsidiary of Orleans’ Deret Group,
acquired the 120-bedroom, 3-star Turone Hotel in
the centre of Tours, in a transaction conducted
by Christie + Co. The hotel adds to CAP117’s
hotels operated under the Accor flag.
2-star Alizé Hotel
Christie + Co’s Marseille office sold the leasehold
in one of the best located hotels in Marseille city
centre, the 39-bedroom Alizé Marseille Vieux
Port Hotel. The hotel was acquired by ValueState
Hotels, an investment and hotel management
company associated with the Proximity Investment
Funds, OTC Commerce et Foncier.
3-star Best Western France Hotel
Christie + Co’s Lyon office sold the freehold
of the Best Western France Hotel in Bourg-en-
Bresse for an undisclosed sum. This 3-star hotel
offers 44 rooms and is situated in the heart of
the city centre. The France Hotel received the
European Ecolabel in July 2011, one of only 27 in
France to do so.
3-star Relais d’Aumale Hotel
Christie + Co’s Paris office sold the freehold of the
Relais d’Aumale Hotel, the ancient hunting lodge of
the late Duke d’Aumale — the last private owner
of Chantilly Castle. This 3-star hotel/restaurant
comprises 24 rooms and suites and offers fine
dining experiences with its gastronomic restaurant
surrounded by a magnificent garden.
Hôtel Alizé
Relais d’Aumale Hotel
Philippe Souterbicq
Managing Director, France
11

International Business Outlook 2012
Germany
Signs of uncertainty
In Germany, following the positive
developments of 2010, the first six months of
2011 started promisingly from a demand and
transactional perspective. The productivity of
the key German hotel markets increased by
approximately eight per cent in the first half
to reach a transaction volume of ¤500 million;
a year-on-year increase of approximately 30
per cent.
Christie + Co’s contribution to this positive
development included the disposals of the
Mövenpick Hotel at Stuttgart Airport and
an internationally-branded hotel in Munich.
Another sign of a bullish market is that larger
portfolios were brought to the market, as they
were during the peak years from 2005 until
2007. The portfolio of QMH Germany, which
Christie + Co was appointed to sell, serves as
a good example. All these trends suggested
promising results as 2011 progressed.
In the third quarter of 2011, however, when
negative news coverage suggested an
upcoming debt crisis and the media reported
the credit ratings of the US and several
European countries being downgraded,
the market participants’ high spirits were
dampened. Subsequently, transactional
activity started to slow down, driven by the
banks’ reluctance to finance in order to fuel
the market. As a consequence, it was forecast
that the 2010 transaction volume of ¤900
million would not be reached again.
Predictions are quite challenging as no-one
can tell if we are already in the middle of
a financial crisis or still at its doorstep.
Whatever the case, there are signs that a
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depression as dire as 2008 and 2009 is not
to be expected, for macro-economic indicators
still imply a positive development for Germany
in 2012. Meanwhile, European politicians are
doing what they can to provide sufficient tools
to calm the financial markets.
Nevertheless, it is more than likely that
lenders will focus on core transactions in
2012. Hence, hotel deals involving a higher
risk, such as developments, will become
more difficult to complete as loan-to-value
ratios will decrease and higher risk premiums
on loans will reduce returns. Due to the
more challenging financing environment,
opportunistic investors will be forced to
adjust their business model. As a result, we
anticipate that cash-rich buyers, such as high
net worth individuals and property funds, will
again dominate the market.
There are still some larger transactions in
the pipeline, initiated in 2011 and likely to be
completed in 2012, even though the parties
involved will be required to provide creative
solutions for those deals to be completed.
In addition, supply with a distressed
background might enter the market if hotel
demand collapses in the event of an overall
economic downturn, limiting the debt
servicing potential. Eventually, banks will
be forced to exit from distressed exposure
to clear their books in view of the Basel III
regulatory standards.
Case Studies
Lease of the Mercure Hotel
Bielefeld City, North Rhine-
Westphalia
On the exclusive instruction of the owner, the
closed-end property fund DS-Fonds Nr. 17
Mercure Hotel Bielefeld Herbert Sacksteder
KG, Christie + Co procured a new operator,
Kiel-based Nordic Hotels, for the Mercure
Hotel Bielefeld City. After a soft refurbishment,
Nordic Hotels will run the 3-star superior hotel,
as a franchisee of Accor under the Mercure
brand, on the basis of a 15-year lease contract.
The 123-bedroom hotel also comprises three
conference rooms, a restaurant as well as a bar
and is located in Bielefeld’s city centre, close to
the historic old town.
Sale of the Mövenpick Hotel
Stuttgart-Messe
On behalf of the owner, Union Investment Real
Estate, Christie + Co sold the Mövenpick Hotel
Stuttgart-Messe to a group of investors based
in the Middle East. The recently-renovated
229-bedroom hotel, located close to Stuttgart
Airport, is operated on a management contract
by a subsidiary of Grand City Hotels.

Mercure Hotel Bielefeld City
Sale of the Best Western
Macrander Hotel in Offenbach,
close to Frankfurt am Main
Christie + Co provided advice to a foreign
investor in the course of their acquisition of the
Best Western Macrander Hotel in Offenbach
am Main. The hotel, until then owned by a fund
managed by WestFonds, offers 127 bedrooms and
seven conference rooms and provides excellent
transport connections. It is operated on the basis
of a lease contract by Macrander Hotels.
Sale of the Ibis Hotel Aachen
Marschiertor, North Rhine-
Westphalia
On behalf of the owner, DS-Fonds Nr. 19 Hotel
Ibis Aachen Herbert Sacksteder KG, a subsidiary
of Dr. Peters Fondsverwaltung GmbH & Co. KG,
Christie + Co sold the 110-bedroom Ibis Hotel
Aachen Marschiertor to an opportunistic fund.
The buyers operate the business via one of their
subsidiaries as a franchisee of Accor Hotellerie
Deutschland GmbH under the Ibis brand.
Markus Beike
Managing Director, Germany
13

International Business Outlook 2012
Middle East
and North Africa
Dubai Office
Christie + Co broadened its network and
international focus with the opening of its Dubai
office in March 2011. Building on its existing
relationships in the Middle East and North Africa
(MENA) and combining these with a wealth of
knowledge and experience from a team positioned
in the region, the initial focus for the Dubai office
is to provide consultancy services to companies
based in, or wishing to enter, the MENA countries.
After a successful launch event at the prestigious
Burj Khalifa, the first challenges of operating
in the market were presented in the form of
significant political upheaval in Egypt, Libya and
Tunisia, and civil unrest in Bahrain and Syria —
the so-called ‘Arab Spring’.
Whilst these events understandably impacted
hotel performance and halted investment
decisions in those locations in the immediate term,
they underlined the strength and stability of other
countries in the region, notably the United Arab
Emirates, where rebounding hotel performance
in the second half of the year was a welcome
surprise to hotel operators.
GCC focus during 2011
Our focus during 2011, particularly after the
events of the Arab Spring, was maintained
on the opportunities within the markets
of the Gulf Co-operation Council: Bahrain,
Kuwait, Oman, Qatar, Saudi Arabia and the
United Arab Emirates.
Qatar has the highest per capita GDP and the
fastest growing economy in the region.
It is currently the focus of new activity as the
authorities plan how to meet the requirements
for hosting the 2022 World Cup. From significant
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infrastructure down to the last hotel room,
there is a lot to do in the next ten years. With
10,000 hotel rooms currently and a further 6,700
in the pipeline, there is still a preoccupation
with upscale hotel development, but to meet
the needs of a changing visitor profile this will
quickly morph into the diversified product of a
more mature hotel market, and even more new
hotel announcements.
During 2011 Christie + Co had an insight into the
strategic development issues facing Qatar when
we advised on the development of waterfront
hotels in the up-and-coming Lusail district.
Oman continued to see many of its larger
tourism projects on hold during 2011, largely
due to financing issues. Although the country
has yet to complete any of the government
approved projects with Integrated Tourism
Complex (ITC) status, this period has allowed
a re-planning and re-prioritisation of targets
within the larger projects. This could better
align launch dates with the completion of
the new terminal at Muscat International
Airport, growth of Oman Air and improved
direct air access for the tourism market.
Hotel development activity is progressing in
Salalah, where the international airport is also
undergoing expansion. During 2011 Christie +
Co provided development advice for a resort
on an isolated beachfront site outside Muscat.
The United Arab Emirates is dominated by the
existing and future hotel supply in the key
commercial centres of Dubai and Abu Dhabi.
Whilst economic growth has been restrained in
2011 it is still one of the largest economies in the
region, behind Saudi Arabia and Iran.
Concern with the future hotel supply-demand
relationship has shifted from Dubai to Abu
Dhabi during the year with hotels cautious about
their operating environment and hesitant to
make long-term projections. Whilst Dubai took
immediate advantage of the fallout of the leisure
and MICE (meetings, incentives, conferences,
exhibitions) markets generated by the Arab
Spring, much of Abu Dhabi’s hotel supply and
related infrastructure is still under development.
There has been a rethink on some of the
larger island projects, with initial plans being
redrawn and much longer completion dates
being agreed. In 2011 Christie + Co advised on
strategic redevelopment options for Hilton hotels
in Abu Dhabi and Al Ain, the development of a
lifestyle hotel in Dubai, and the renegotiation of
the contract terms for what would become the
Radisson Royal Hotel in Dubai.
Outlook for 2012
Into 2012, we expect hotel development activity
to be focused on Qatar and the completion of
hotel projects under development in the United
Arab Emirates. Older properties across the Gulf
countries will see a number of closures and
major renovations to keep pace with the quality
of new supply.
Saudi Arabia will be a growth market, not only
in its unique religious tourism market of Mecca,
where hotel performance continues to be strong
despite significant additions to supply, but in
secondary cities and around commercial hubs.
Oman will see major tourism projects move
forward during the year, evidenced by a revival
of activity towards the end of 2011.

Jordan, Lebanon and Syria show potential for
the longer term, but volatility in the region will
hamper any serious investors from committing
at present, and much of Northern Africa will be
subject to the same experience. Much longer
term there is significant potential to develop new
hotels in Libya and Syria.
Overall, in an area that has always seen volatility
and recovered from it, there are pockets of
opportunity and growth potential – although
some countries will face an uphill political
and economic journey during 2012 before the
recovery of the hotel industry can progress.
Christie + Co looks forward to conducting
projects across the MENA region throughout
2012 and extending to the full geographic reach
of the area.
Case Studies
Abu Dhabi National Hotels
Christie + Co provided advice to Abu Dhabi
National Hotels company, recommending
long- and short-term redevelopment options
for the existing 327-room Hilton hotel in
Abu Dhabi and the 202-room Hilton hotel in
Al Ain. An evaluation of alternative options
was undertaken in the context of the current
operating performance of the properties and in a
significantly changed future hotel environment.
ACICO
Christie + Co assisted ACICO with the negotiation
of the management contracts for the newly
rebranded 471-room Radisson Royal hotel in Dubai
and the 257-room Radisson Blu Resort in Fujairah.
Both hotels had previously been operational
under the JAL Hotels and Resorts brand.
Hilton Abu Dhabi
Radisson Royal Hotel, Dubai
Gavin Samson
Director, MENA
15

International Business Outlook 2012
The Nordic Region, Russia
and the Baltic States
Financial distress caused by the situation in
the European Monetary Union (EMU) area has
also been felt in the Scandinavian and Nordic
region. The uncertainty in the economic
markets has left both developers and lenders
very cautious, increasing lead times.
Similarly, the transaction market has been
very subdued and no major deals have
been reported. Pandox is still absorbing the
acquisition of Norgani AS’s portfolio of 73
hotels from the previous year.
In terms of hotel market performance, most of
the markets have shown recovery in volume
terms, but the recovery in average room rates
is still lagging behind.
Finland
Finland is expected to produce one of the
strongest GDP growth levels in Western
Europe in 2012. This, together with the
continuing absence of international hotel
management companies and brands, continues
to provide an interesting opportunity for both
operators and investors. The market is still
concentrated on the mid-market segments,
with no new domestic brands emerging.
The recovery of Helsinki’s hotel market from
the 2009-2010 slump has been, to a large
extent, volume driven and fuelled by strong
increases in leisure demand. We expect the
market to continue its recovery in 2012 and
average room rates to increase moderately
in the short term.
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Sweden
Sweden appears to have weathered the
economic downturn reasonably well and
experienced one of the strongest economic
improvements in Europe in 2011. Not being
part of the EMU appears to have further
enhanced the country’s economic position.
Stockholm has for a long period been the
leading Scandinavian and Nordic hotel
market, and once again has produced strong
trading results in 2011. However, together
with weaker economic growth expectations
for 2012 and a relatively large amount of new
supply still to be absorbed, the near-term
growth expectations on volume and rates are
reasonably modest for 2012.
Denmark
Denmark’s economy has suffered from low
domestic demand and growth was mainly
driven by exports in 2011 – thus the country
is expected to achieve only moderate gross
domestic product growth in 2012. Copenhagen
has for a long period been the conference
capital of Northern Europe. The city again
attracted a large number of conferences in
2011 and is expected to continue being a
popular destination for the next couple of
years, bringing in increasing numbers of
congress and conference delegates. However,
the city has experienced a strong increase
in new hotel supply over the past couple of
years, leaving the expected occupancy growth
at a moderate level. As a result of the new
supply, rates have been under pressure, and
only slight increases are expected in 2012.
Baltic Region
The economies of the Baltic States have so
far been reasonably resilient in the face of
deceleration in Western Europe. However, the
region is on the brink of a clear export-led
slowdown, and thus the economic growth rate
expectations for 2012 are lower than the growth
experienced in 2010-11.
Tallinn’s hotel market is heavily dependent on
Finnish travellers. As Finland has started to
show signs of financial recovery, with further
recovery expected to take place in 2012,
the market-wide demand volume increase
for hotels in Tallinn is expected to continue.
However, most of the demand in the market is
leisure-driven with lower yielding room rates.
Estonia joined the Eurozone in 2011 and is
still going through rate conversion in the
markets, which together with the market mix
realities translate to low room rate growth
expectations in 2012. It appears that both
Vilnius and Riga are experiencing relatively
strong recovery in terms of volume, but this
is against very serious market-wide drops in
2009-2010. These markets were also subject
to serious room rate discounts during the
slump in hoteliers’ desperate attempts to
attract customers. Overall, it seems that rate
recovery will be more difficult than expected
in both markets. Vilnius and Riga are both
expected to continue recovering in terms of
volume, but rate recovery expectations for
2012 are moderate at best.

Russia
The hotel market in Russia continues to be
active. St Petersburg is reaching saturation
point in the upscale segment due to recent
and anticipated openings, but will continue
to provide attractive options for further
international brands operating limited
service and mid-market hotels. International
hotel operators are expected to continue
penetrating the country further east to areas
such as the Krasnador region and the main
metropolises throughout the country.
Proposed hotel Lappeenranta
Case Studies
Proposed Arctic Resort, Salekhard,
Russian Federation
Christie + Co was commissioned by the local
authorities to conduct a feasibility study on a
proposed Arctic Resort Hotel & Spa planned in
Salekhard, Yamalo-Nenets Autonomous Region
(in western Siberia) in the Russian Federation.
The assignment involved advising the authorities
on the scope and quality of facilities required to
optimise the financial feasibility of the project
while enhancing the wider tourism development
plan for the region.
Kimmo Virtanen
Director, the Nordic Region,
Russia and the Baltic States
Proposed Hotel & Water Park
Sønderborg, Denmark
Sønderborg Harbour Company is co-ordinating
the development of the harbourside master
plan development in Southern Denmark. The
master plan was designed by the prize-winning
architect Frank Gehry. Christie + Co was
brought in to update a feasibility study for the
proposed full-service hotel and the adjacent
large water park development. After completing
the feasibility study, we successfully approached
a number of hotel-operating companies and
have now provided the client with a shortlist of
interested management partners for the project.
The operator search for the water park is still
ongoing and we anticipate providing a shortlist
of potential operators to the client.
Proposed Hotel Lappeenranta,
Finland
Lappeenranta draws the maximum benefit from
its proximity to the Russian border and today the
city records the highest tax-free sales in Finland.
Our client controls a prime site providing views
over Lake Saimaa and has plans to develop a 200room
hotel with a spa. Christie + Co conducted
a feasibility study on the project and recently
pursued a search for an operating company for
the proposed hotel.
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International Business Outlook 2012
Spain
The Spanish hotel industry began showing
signs of recovery in 2010. This continued in
2011, demonstrating that the hotel sector is a
resilient one. Despite these signs, the economic
environment is affecting transactional activity,
given the scarcity of available finance and the
uncertainty of the markets.
In 2011, transactional activity in Spain continued
to be minimal, with two of the biggest deals
being completed by Christie + Co. The two
landmark Spanish hotels were successfully sold
by Christie + Co early in 2011 for a combined
sum in the region of ¤65 million.
We were expecting 2011 to be the year when
many distressed assets would be brought
to the market by banks and receivers, but
that did not happen as the Spanish banks
continued to refinance businesses. Next year,
that trend may change as the banks begin to
move assets from their balance sheets, giving
confidence to the markets.
Most buyers are looking for centrally-located
hotels in Barcelona and Madrid which are
perceived as secure places to invest, with
good trading results and excellent levels
of occupancy and ARR. In other areas, it
does not matter if the hotel is within a city,
mountain or coastal location; the interest is
generally in lease or management agreements.
Christie + Co introduced its performance
monitoring services to the Spanish market
in 2011. These services have generated much
interest from owners due to our reputation
within the hotel market, as well as our market
knowledge. Our performance monitoring
reports provide our clients with a wide
perspective on hotels’ positioning within local
markets and identify primary competitors.
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With the change to the Spanish government
in December 2011, we anticipate that 2012 will
bring more opportunities to those investors
with equity looking for attractive deals in Spain,
especially as the banks adapt to the economic
environment. We foresee that the decline in
asset values will be accepted by banks as the
only solution to manage their portfolios.
Case Studies
El Rompido Golf
Christie + Co sold the hotel El Rompido Golf
on behalf of the Spanish hotel chain Set Hotels
to the Berlin-based operator Precise Hotel
Collection. The hotel is a stunning 5-star,
184-bedroom property with 12 suites, which is
based in one of the most outstanding resorts in
Costa de la Luz on the West Coast of Huelva.
El Rompido Golf Hotel
Inmaculada Ranera
Managing Director, Spain
and Portugal
Performance Monitoring of the
Hilton Diagonal Mar (Barcelona)
Christie + Co Spain was appointed by Iberdrola
Inmobiliaria to carry out the performance
monitoring of their hotel Hilton Diagonal Mar
(4-star, 433 rooms), located in the 22@ district of
Barcelona, one of the most active areas in the city
in terms of new business and leisure activities.
Iberdrola Inmobiliaria appreciates our reputation
as hotel advisers and considers our performance
monitoring service a valuable tool providing
detailed insight into how an asset is trading in the
local market.

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