There is a difference between investing in hotel rooms and investing in hotel companies. You can buy shares in the Hilton Group or Intercontinental or you can invest directly in a specific hotel and the rooms within it.
Investing in hotel room companies
This is an idea that has gained a lot of publicity, both positive and negative, over the past few years. Famously stemming from a concept introduced by legendary tycoon Donald Trump, in theory hotel room investments are the ultimate in passive investments. By investing with a hotel investment company your investment is completely managed for you, leaving you free to get in with your life without having to worry about it. Compared to the nearest traditional comparison to hotel room investment, which would be buy-to-let, this is a massive advantage. However, despite their seeming popularity and the glamour of their websites, hotel room investment has had some casualties and you should do plenty of research before deciding on this as an investment option.
The term “hotel investment companies” covers this phenomenon and can refer to any of the hundreds of hotel room investment companies that are out there. But it can also mean investing in the hotel and real estate companies themselves. This merging of terms can cause some confusion and you should be sure of what it is you are looking for before starting out on your research.
An example of a hotel investment company is International Hotel Investments Plc (IHI). This company was launched as a PLC in Malta in 2000. Their business is in acquiring, developing and operating upmarket hotels in Europe, the Middle East and beyond. They principally operate in fast growing tourist destinations. IHI’s strategy is to construct new, landmark developments and to turn around existing hotels through major refurbishment and expansion. IHI seek to work with local authorities to realise the value locked up in landmark property. With an impressive portfolio that includes (among others) landmark hotels in London, Prague, Lisbon, Budapest and St Petersburg, IHI have been very successful. As a floated company it is possible to check out IHI’s trading history and invest in them on the London Stock Exchange.
Kingdom Hotel Investments is a similar company that works with the same strategy. As a subsidiary of Kingdom Holdings Co it is possible to invest in KHI on the Saudi Stock Exchange.
You might want to ask yourself why you think hotels are a good investment. Maybe you are interested in a certain geographical area that you feel is fast emerging and you would like to invest in. Or maybe you are interested in a certain class of hotel, either the budget or the exclusive end of the spectrum. Or maybe you are familiar with developments going on in your area and think that it will be a successful venture and you’d like to get involved.
A brief search will find you many hotel investment companies to invest in. Here is a list of some of the major players in the hotel investment sector, all of whom may be invested in on their respective stock exchanges:
Remember that investing in shares can be a risky strategy, especially in uncertain times. Do your research and only invest money that you can afford to.