In the Jones Lang LaSalle Hotels latest Hotel Investor Sentiment Survey (HISS), 65% of US respondents reported their short term investment intention is to buy.

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When amalgamated with survey respondents from across the globe, 45% reported their short term investment intention is to buy - the strongest sentiment since September, 2000.

Short Term Investment Intentions (weighted by number of respondents)

Source Jones Lang LaSalle Hotels

The marked increased appetite for owning hotel property across North and Latin America is fostered by a continued rise in both ADR and RevPAR, along with proven strong comparative returns against other asset classes. Additionally, spiraling construction costs have made most new-build projects less attractive and acquisitions more appealing.

The HISS survey, which targets the world's 2,000 largest investors and owners of tourism properties, is the only global survey of its kind.

Investment Intentions in the Short Term

Source Jones Lang LaSalle Hotels

There are 10 buyers for every seller in key urban gateway markets such as San Francisco, Chicago, New York, Washington D.C., and Hawaii. Across North and Latin America, this figure drops to five buyers for every seller. This environment is reflective of the continued weight of capital and shortage of product in the region.

At least 75% of survey respondents want to buy in San Francisco, Pacific Northwest, New York and Hawaii. The strong appetite for these markets has not changed from six months ago. Mexico City outpaced all other cities in the build category, as it did year-to-date in 2004. Foreign capital is likely to continue filtering into Mexico, as positive economic indicators are encouraging both demand and financing. In Latin America, investors have switched their intentions from build to hold.

Investor interest in building new hotels remains weak at 8.6%, due in part to the popularity of hotel/residential projects and condo hotels, as the pre-sale of units allows developers to recoup construction costs quickly and obtain attractive financing. Nevertheless, the low investor appetite for building hotels indicates that liquidity and lodging supply will be limited.

For a full copy of the Hotel Investor Sentiment Survey global report, visit here.