Publications

- July 1, 2015: Vol. 2, Number 7

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The Oil Dividend: The low cost of petroleum and what it means for global hotel real estate

by Estelle Murer and Joe Stather

Hotels are nudging their way into the mainstream, with generous year-on-year increases in investment volume. A shortage of quality opportunities across traditional commercial real estate has generated interest, but investors are also seeing the substantial returns that can be made in the sector on the back of positive economic trends. The low price of oil is among these, and hotels are one of the few sectors inherently well positioned to reap the benefits.

Over the past year, the tumbling price of oil has changed the course of many macroeconomic and social trends. Investors can anticipate a widely positive impact on commercial real estate, with demand increasing across the board.

Oil prices are a key driver of inflation, and the recent trend has kept inflation low in many western markets. Central banks are working to avoid a “cheaper tomorrow” deflation scenario, but households are finally enjoying real wage growth. With interest rates likely to remai

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