There are a number of investment funds available based on the hotel and hospitality industry.
HEI Hotels & Resorts manage 3 funds, helpfully titled HEI Hospitality Fund I, II, and III respectively. All three funds concentrate on investing in full service, high end properties in Canada, the Caribbean and the USA.
HEI Hospitality Fund II, L.P.
HEI’s second Hospitality Fund was established in February 2006 and is a $425million (£269million) discretionary private equity fund. This one was formed to acquire and develop assets in hospitality-related businesses. Fund II comprises 9 of the country’s most prestigious university endowments (7 of which are already investors in Fund I) as well as several members of the HEI senior executive team. This fund has invested in (or committed capital to) 14 full service, high end, luxury hotels across the U.S.A, including the renowned Equinox Resort & Spa in Manchester Village, Vermont.
HEI Hospitality Fund III, L.P.
The third HEI Hospitality fund was established in July 2008 and is a $515.35million (£326.3million) discretionary private equity fund. Again, the aim of the fund is to acquire and develop hospitality related assets. Fund III comprises some of the US’s major institutional investors and members as well as more members of HEI’s senior executive team. This fund is also committed to investing in full service, upscale and luxury hotels across the U.S., Canada and the Caribbean.
Thayer Lodging Group is a privately owned hotel investment group based in Maryland, USA. They established their initial fund (Fund I) in 1991. Originally this fund acquired 8 properties, including the Annapolis Marriot waterfront hotel. There are two remaining hotels in the portfolio and investors in the initial fund realised a Gross Annual IRR of 34.6%.
One location that seems very positive about the future of hotel investments is Brazil. A recent survey by Ernst & Young predicted a surge in investments in the South American economic power house, particularly in property. Brazil is experiencing an economic explosion and with it hosting the World Cup in 2014 and then the Olympics in 2016 this is expected to continue. According to the Ernst and Young survey, the primary target of around 50% of the investors looking at Brazilian real estate investments is hotel investments.