February 2024: the real estate, tourism and hotel press review
Last update : 28 February 2024
HoliProject presents its monthly press review to help you identify and understand the news that has marked the last few weeks. On the agenda for February: the US commercial property crisis raises questions. What will be the impact on European banks and assets? Against this backdrop, there is plenty to worry about. But opportunities are emerging, and some investors remain optimistic about how the situation will evolve. At the same time, there is some good news to put a smile on our faces: the tourism sector is doing well, with visitor numbers comparable to pre-pandemic levels.
Commercial Real Estate: Vacant Offices and a Banking Crisis?
The looming crisis in the U.S. commercial real estate sector threatens to trigger a genuine banking crisis, with $929 billion in loans maturing in 2024. Nearly 14% of these loans are of concern, according to a document from the National Bureau of Economic Research. Two main factors explain this scenario: the popularity of remote work and rising interest rates. A study suggests that if the default rate reaches 10%, about 231 banks could face insolvency, finding themselves in a situation comparable to that of Silicon Valley Bank. The decline in real estate values and record vacancy rates thus pose a major systemic risk. (Dailymail)
Tourism: The Sector’s Recovery Confirms and Intensifies
The tourism sector appears to be on track to reach and exceed pre-pandemic levels by 2024. The latest analyses from the World Tourism Organization indeed reveal an impressive recovery with 1.3 billion international arrivals in 2023, equating to 88% of pre-crisis traffic. This resurgence is driven by the release of pent-up demand, improved air connectivity, and the strong comeback of Asian markets. The Middle East surpasses all expectations. Europe and Africa are nearing their 2019 levels. These promising results thus mark a return to normalcy and allow us to highlight the resilience of the sector. (UNWTO)
Real estate: the consequences of Evergrande’s liquidation
This is a major turning point for the Chinese property sector. Developer Evergrande, the emblem of the country’s property crisis, has been forced into receivership. The reason: a colossal debt of over 300 billion dollars and slowing growth. Against this backdrop, Evergrande has failed to present a satisfactory restructuring plan. Despite attempts at dialogue, the creditors were unable to find common ground, resulting in an immediate and drastic fall in Evergrande’s share price on the Hong Kong stock exchange. This affair is likely to have far-reaching repercussions for the Chinese economy as a whole (Libération).
Real estate: the momentum continues in Savoie
The property market in Savoie and Haute-Savoie is defying general trends with remarkable growth: +5% in 2023. This trend illustrates the robustness and appeal of these mountainous, tourist regions, underpinned by an ongoing craze for second homes. It has to be said that the Savoie region is a haven for investors and mountain lovers alike. Local resorts, for example, are selling at €4,000 per square metre, and the trend is upwards. This contrasts with the decline seen in the main metropolitan areas. (Lyon Capitale)
Tourism: An Unprecedented Partnership between Switzerland and Saudi Arabia
In February, Switzerland and Saudi Arabia launched an unprecedented partnership in the field of tourism. The goal is to globally promote the attractiveness of both territories through an ambitious collaboration. This collaboration mainly focuses on enriching marine, cultural, heritage, and rural experiences. It also stands out for its interest in new technologies. A joint investment is particularly considered to devise innovative solutions that simplify travelers’ lives. This initiative thus marks an original example of international cooperation. (BNN Breaking)
Commercial Real Estate: The U.S. Situation Affects Germany
The commercial real estate market in the United States is causing concern. This situation particularly impacts Deutsche Pfandbriefbank. The Munich-based bank, specializing in commercial real estate loans in Europe, has significant exposure in the United States. With rising vacancy rates, exacerbated by the popularization of remote work and higher interest rates, Deutsche Pfandbriefbank is facing significant challenges. 15% of its loan portfolio, equivalent to €5.4 billion, is indeed linked to commercial real estate in the United States. In response, its outlook has been revised by S&P, leading to a record drop in its stock. Despite this, Deutsche Pfandbriefbank remains confident. (Deutsche Welle)
Commercial Real Estate: Opportunities Amidst Crisis?
The commercial real estate crisis in the United States, exacerbated by massive debts maturing and rising interest rates, is causing global concern. Losses of $1 trillion are anticipated for office properties. Despite this bleak picture, some investors see opportunities, with the chance to acquire quality assets at advantageous prices. They follow the maxim once popularized by Warren Buffett: “Be greedy when others are fearful.” Thus, figures like Ian Jacobs and investment firms are positioning to buy office spaces at reduced prices, betting on a future market recovery. (Business Insider)
Commercial Real Estate Crisis Worsens and Raises Questions
The commercial real estate crisis is worsening in Europe, mirroring situations in the United States and Japan. Consequently, Deutsche Pfandbriefbank, specializing in commercial real estate financing, has seen a significant drop in its shares due to the persistent weakness of the market. At the same time, the unexpected losses of New York Community Bancorp in the United States are concerning and exacerbate fears of a sectoral crisis. In this context, the European Central Bank and Moody’s are warning about the decline in prices and transactional activity in commercial real estate. Once again, the challenges are considerable, heightened by rising financing costs and declining rental incomes. (Euronews)
Tourism: the democratisation of slow tourism
Slow tourism is one of the new trends in a sector undergoing rapid transformation. The concept is simple: travel differently, with experiences that focus on slowness, the environment and local cultures. This movement favours authentic experiences, a world away from mass tourism and with a clear social impact. In France, the momentum is building. We’re seeing it particularly in the Nouvelle-Aquitaine region. In the Basque Country, Charente and Creuse, certain destinations are particularly conducive to reconnecting with nature and showcasing regional culinary traditions. (Sud-Ouest)
Real estate: diversification as a defence against uncertainty
“The market is not far from bottoming out”. Laurent Fléchet of Primonial Reim sees 2023 as a difficult year for the property market, marked by a sharp rise in interest rates and economic uncertainty. For 2024, he expects the market to stabilise thanks to greater visibility over central bank policies. Despite a fall in prices and transaction volumes compared with 2022, he sees opportunities emerging for value creation in the property sector. The only condition is to adopt an intelligent and diversified strategy. As a result, Primonial Reim has focused on healthcare and residential property to reduce its exposure to commercial property. (L’opinion)
Hotels: trends for the new year
How will the French hotel industry develop in 2024, when the summer will be marked by the Olympic Games in Paris? This is the question posed by journalist Jean Bernard, as the increase in overnight stays continues despite inflation. Trends are now emerging. In particular, he notes a number of staycations, with French people motivated by ecological considerations and the rediscovery of their national heritage, favouring local holidays. Environmental commitment is becoming an imperative. The hotel sector, aware of the stakes, is now moving towards sustainable practices, through labels such as La Clef Verte. (TourMag)
Real estate: the crisis is intensifying on the Chinese market
Alicia García, an economist at Natixis, is convinced that the slowdown in the Chinese economy should benefit Europe, against a backdrop of rising inflation. It’s true that European exports to China are likely to fall over the coming months. However, this situation offers new opportunities for European players, as a genuine paradigm shift is set to take place. Chinese growth is running out of steam, and the property sector is over-indebted. “The property bubble is a consequence of other problems in the Chinese economy”, says the expert. (Euractiv)
Commercial property: ECB warns European banks
The European Central Bank (ECB) is stepping up its surveillance of banks’ exposure to commercial property. The reason: the sector is considered vulnerable since the pandemic and the recent rise in interest rates. Faced with the problems of certain banks, such as Deutsche Pfandbriefbank, the challenge is twofold: to avoid overreaction and to prevent any form of laxity. The European Central Bank has alerted financial institutions in the eurozone to the need to strengthen their capital base to better manage commercial property risks. The aim is to maintain financial stability and avoid the supervisory errors seen in the case of Silicon Valley Bank in the United States. (Les Echos)
Tourism: Cities Take Action Against Overtourism
Faced with unsustainable tourist numbers, numerous European destinations are beginning to adopt bold and drastic measures. Amsterdam has increased its tourist tax and restricted access to certain buses in the city center. Paris plans a 200% increase in its tourist tax before the Olympics, while France promotes lesser-known destinations through social media. Venice, for its part, is experimenting with a tax for day visitors and limiting the size of groups. These initiatives share the same goal: to limit flows in order to preserve tourist sites and the quality of life of residents. (Euronews)
Date de première publication : 26 February 2024
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