2006 CROATIA Destination of the Past and a Promise for the Future

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1 26 CROATIA Destination of the Past and a Promise for the Future Hala Matar Choufany (MBA) Sarah Leemann HVS INTERNATIONAL LONDON 7-1 Chandos Street Cavendish Square London W1G 9DQ United Kingdom May 26 New York San Francisco Boulder Denver Miami Dallas Chicago Washington, D.C. Weston, CT Phoenix Mt. Lakes, NJ Vancouver Toronto London Madrid New Delhi Singapore Hong Kong Shanghai Sydney São Paulo Buenos Aires Newport, RI

2 Croatia Destination of the Past and a Promise for the Future Croatia is a fascinating destination with a long history, a diversified culture and numerous unmatched natural resources. The country has a strong desire for growth, particularly after the devastating civil war that started in 1991 and lasted until The end of the war left the country exhausted, with most of its infrastructure and buildings destroyed. Slowly, Croatia started to return to its pre-war life, and there was a strong desire to rebuild the country up to its pre-war standards. Today Croatia represents another Eastern European country that has a promising future and the potential to become a key business and leisure destination. Adriatic Sea, of which only 66 are inhabited. The Adriatic Sea has always been an important maritime route between east and west. The climate is Mediterranean along the Adriatic coast: warm, dry summers and mild winters, with 2,6 hours of sunlight on average a year. In the interior of the country, the climate is continental with hot summers and cold, snowy winters. Map of Croatia In this report, we shed some light on the current and future outlook of the main hotel markets in Croatia. We specifically assess the investment opportunities that currently exist in the market for the development of, and investment in, hotels. According to the WTO, Croatia travel and tourism is expected to generate US$11 million of economic activity (of total demand) in 25, growing (in nominal terms) to US$25 million by 215. Travel and tourism demand is expected to grow by 4.9% in 25 and by 7.8% per annum, in real terms, between 26 and 215. Currently, the two most important tourist cities, and hence the most attractive cities for a potential hotel investment, are Zagreb (Croatia s capital) and Dubrovnik (located on the Mediterranean Sea). Therefore, we have focused our assessment on the potential for hotel investment in these two key cities. We also briefly discuss potential investment on Croatia s coastline and numerous islands. Location The Republic of Croatia is located in southeastern Europe, bordering Slovenia to the west, Hungary to the north, Serbia and Montenegro to the east and Bosnia- Herzegovina to the south. The country covers a land area of 56,691 km² and has a long coastline, bordering the Adriatic sea, which totals 2,28 km. Croatia has 1,185 islands in the In addition to the 1,185 islands in the Adriatic Sea, there are 217 towns in Croatia divided into twenty counties or nine regions: Central Croatia, Zagreb, Istria, Dalmatia Sibenik, Dalmatia Split, Dalmatia Zadar, Dalmatia Dubrovnik, Kvarner and Highlands, and Slavonija. Croatia is influenced by Middle- European and Mediterranean culture, civilisation circle and traditions. An extremely rich and valuable cultural and historical heritage points to a millennium old presence of Croatia in the area; with Diocletian's Palace at Split, Sibenik Cathedral, Romanesque Town Trogir, Plitvice Lakes, the Basilica of Euphrasius in Porec and Dubrovnik 1

3 representing a part of the world cultural heritage under UNESCO protection. History Thanks to the favourable geographical characteristics of the coast, with its numerous bays, inlets and coves, the coastal belt has always been a significant mercantile and nautical route. Archaeological findings prove that in the 6th century BC the ancient Greeks had commerce with the Illyrians by means of the sea, and that they founded their colonies there (Pharos, today s Starigrad, on the islands of Hvar and Issa or Vis). Later on, the Romans arrived, and they not only built palaces and summer residences but they also spent a considerable amount of time on the sea; there are many underwater discoveries located between Pula and Cavtat which show this to be true. Such findings are mainly amphorae, which at the time were commonly used for storing everything from wine to wheat, oils and perfumes. A new era dawned with the arrival of the Slavs, a period characterised by a constant struggle for supremacy and by defence against diverse enemies. In the 18th century, Napoleon ruled for a short period of time, after which he was replaced by the Austrian monarchy. During the next hundred years, Italy and Austria fought each other for supremacy of the east coast of the Adriatic, culminating in the battle of Vis in The lands that comprise Croatia today were part of the Austro-Hungarian Empire until the close of World War I. In 1918, the Croats, Serbs, and Slovenes formed a kingdom known after 1929 as Yugoslavia. Following World War II, Yugoslavia became a federal independent communist state under the strong hand of Marshal Tito. Although Croatia declared its independence from Yugoslavia in 1991, it took four years of sporadic, but often bitter, fighting before occupying Serb armies were mostly cleared from Croatian lands. Under UN supervision, the last Serb-held enclave in eastern Slovenia was returned to Croatia in Economic Overview Before the dissolution of Yugoslavia, the Republic of Croatia was, after Slovenia, the second most prosperous and industrialised area, with a per capita output perhaps onethird higher than the Yugoslav average. The economy emerged from a mild recession in 2 with tourism, banking and public investments leading the way. Unemployment remained high, at about 13.8% in 24, with structural factors slowing its decline. The principal economic activities in the Republic of Croatia include agriculture, foodstuffs, textiles, wood and timber, metalworking, chemical and petroleum, electrical manufacturing, shipbuilding, shipping and tourism. While macroeconomic stabilisation has been largely achieved, structural reforms lag because of strong resistance on the part of the public and lack of support from politicians. Growth, while averaging an impressive 4% per annum over the last few years, has been achieved through high fiscal and currentaccount deficits. The government is gradually reducing a heavy backlog of civil lawsuits, many involving land tenure. The Economist Intelligence Unit (EIU) forecasts that GDP growth in 25 is expected to remain stable at 3.7%; economic growth is expected to rise to 4.2% in 26. The EU accession process expected by 21 should accelerate fiscal and structural reform. Consumer price inflation is likely to remain relatively low. In Croatia s small, open economy the main driver of inflation is the exchange rate and its effect on import prices. The nominal exchange rate stability of the Kuna against the euro is one of the main planks of the Croatian National Bank s (CNB) monetary policy, given the high rate of euroindexation in the economy (most deposits and a significant portion of corporate loans are in euro or are indexed to the EU currency). The EIU forecasts that the CNB s tight monetary policy, along with some strengthening of tourism inflows, will necessitate further intervention to keep the kuna stable against the euro in 25 and 26. Additionally, the EIU forecasts consumer price inflation to be approximately 2.4% in 25 and 2.6% in 26. Although situated in the heart of Europe and close to central European capitals, Croatia has 2

4 maintained a well-preserved natural environment. Throughout its entire territory Croatia offers diverse forms of tourism, including hunting and fishing, health tourism with 19 inland and coastal resorts, nautical tourism with 44 marinas and about 15, berths, diving, religious tourism, tourism related to family farms and cruising. Numerous cultural monuments, for example Dubrovnik and National Parks such as Plitvice Lakes, are protected by UNESCO. From Istria (which is the closest resort for the majority of European travellers) through Opatija (a previous jet-set resort of the European aristocracy) to Dalmatia and Dubrovnik in the south, the Croatian coast remains attractive due to a mild climate throughout the entire year. Zagreb City Overview Before the civil war, Zagreb used to be one of the most developed cities in southeast Europe, due to a concentration of major regional companies (pharmaceuticals, chemicals, food processing, oil, construction and textiles) and the Zagreb International Fair, which was traditionally the largest trade show in the region. As a result of the long-lasting war, Zagreb lost some of its pre-eminence but has made every effort to regain its position as the leading business city in southeast Europe. Today Zagreb has regained its position as an important business city as it hosts large exhibitions, and is home to many established financial institutions and information technology companies. In addition, Austrian, German and Italian banks have purchased major Croatian banks and significant foreign direct investment has been made in other sectors (such as by Deutsche Telecom). While Croatia is well known as a leisure destination we note that Zagreb is more of a business city, as illustrated in Graph 1 which shows the monthly pattern of visitor arrivals. Graph 1 Zagerb 6, 5, 4, 3, 2, 1, Seasonality of Arrivals in Zagreb vs Croatia 24 January February March April May June July August Source: Zagreb Tourism Office Zagreb October November December September Croatia 3,, 2,5, 2,, 1,5, 1,, 5, The stronger seasonality pattern exhibited by Croatia as a whole when compared to Zagreb indicates that the country is heavily reliant on leisure demand, mainly in the summer months. Demand for hotel accommodation in Zagreb is strongest in April and September when most trade fairs and conferences take place, and decreases in June and July when corporate visitors are on holiday. The peak in the number of arrivals in Zagreb occurs in September, when local business people and corporate visitors return from their holidays. November to January is typically the low season. In order to improve its image as a business destination further, Zagreb has numerous planned developments, including a congress centre, that should have a positive impact upon the number of arrivals to the city. Visitation In 24, international visitation to Zagreb accounted for approximately 71% of the total number of arrivals at hotels and other accommodation. International visitation from 1998 to 24 increased at a compound annual growth rate (CAGR) of approximately 1% (see Table 1). We note that the number of overseas visitors has increased by nearly 8% since 1998 while domestic visitor numbers to Zagreb have remained largely unchanged. The total number of visitors to Zagreb increased by 1% per annum in 23 and 24, which indicates strong growth. Croatia 3

5 Table 1 Domestic and International Visitation Zagreb (s) Total Total Overseas Total Domestic Year Visitors % Change Visitors % Change Visitors % Change % 42.8 % (14.8) % 146 (17.7) % 118 (1.9) % (7.7) (3.3) Growth % 78.9% -.9% Compound Annual Growth Rate Source: Zagreb Tourism Office 6.4 % 1.2 % (.2) % Overseas % Share Domestic % Share As illustrated in Graph 2, the important feeder markets for the city s four-star and five-star hotels are Germany, Italy, and Austria. Consequently, the performance of hotels in Zagreb is heavily dependent on the economic health of its main European feeder markets and the euro exchange rates. Despite the continuing economic difficulties of Zagreb s main feeder markets, the number of arrivals in Zagreb from Germany, Italy and Austria has increased at a CAGR of 1%, 8% and 5%, respectively, since The Zagreb Tourism Office aims to focus its marketing resources on key European markets, such as Germany, Austria, France and Italy. The Tourism Office is forecasting further growth in total visitor arrivals, due mainly to the combined efforts of the Tourism Office and the Convention Bureau to promote Zagreb as a leisure and business destination. In addition, the Tourism Office envisages a strong increase in visitor arrivals, especially business travellers, once Croatia becomes part of the EU by 21; other recent EU joiners such as Poland, Slovenia, Slovakia, the Czech Republic, Estonia and Latvia have experienced similar rises. Graph 2 Source Feeder Market Mix Zagreb 24 5% 4% 41% 5% 6% 6% 6% 6% 1% 11% Germany Italy Austria France Bosnia-Herzegovina USA Switzerland Great Britain Slovenia Other Source: Zagreb Tourism Office Meeting Visitation Most visitors arrive in Zagreb on business or in connection with government affairs. As Croatia has developed business and political relations with Germany, Austria, Italy, the USA and the UK, most business visitors and government officials arrive from one of these five countries. Business demand depends on the progress of the Croatian economy; the EIU has forecast GDP to grow at 3.7% in 25 and 4.2% in 26. Zagreb does not yet have a congress centre but plans for the development of one are underway. At the beginning of 25, it was decided that the land next to the five-star Westin hotel would be used for such a congress centre. View from the top floor of the Westin hotel of the area set aside for the proposed congress centre Currently, Zagreb s meeting facilities are distributed amongst the major hotels and other venues such as the Zagreb Fair (1,44 m²), the Concert Hall (2, m²) and the University of Zagreb (three halls totalling approximately 2,54 m²). Zagreb is one of the top venues for exhibitions and tradeshows in southeast Europe, with events being evenly spread throughout the year. In 24 Zagreb hosted 26 exhibitions. The largest of these (the Auto Show) attracted almost 15, visitors and 2 exhibitors from all over Europe. Airport Statistics Zagreb s Pleso International Airport is the busiest in Croatia in terms of passenger movements. The airport is approximately 2 km south of the city centre and is easily accessible by car. Table 2 details passenger numbers from 1991 to 24. Total overseas passenger movements have grown at a CAGR of approximately 5% since 1996, although this masks some large fluctuations between some 4

6 years. In March 25, Air France reintroduced daily flights between Paris and Zagreb and a tender is expected to be announced before the end of 26 for the redevelopment of Pleso International Airport. The planned redevelopment is likely to cost around 11 million and will increase the capacity of the terminal building to three million passengers annually. The redevelopment is scheduled to be completed by the end of 28. Table 2 Airport Passenger Movements for Zagreb (s) % % % Year Total Change Domestic Change Overseas Change , % 66.1 % , , ,76 (4.3) 341 (8.1) 734 (2.4) , , , , , (7.4) Compound Annual Growth Rate Source: Zagreb Airport 4.3 % 3.9 % 4.6 % Domestic % Share Overseas % Share Zagreb s Hotel Market In 24 Zagreb s hotel market consisted of 29 hotels, providing approximately 3,76 rooms. Graph 3 summarises the distribution of hotel rooms for each category. It is worth noting that, while all three five-star hotels are internationally branded, of the 1,979 mid-market rooms only 416 (21%) are internationally branded. Starwood leads the market with three properties (Westin, Sheraton and Four Points) totalling 991 rooms. Additionally, it is interesting to note that the presence of international brands has increased since 23 with the reopening and rebranding of the Esplanade as the Regent Esplanade hotel (Rezidor) in May 24, the opening of the Hotel Arcotel Allegra (an Austrian brand) in August 23 and the Hotel Astoria became a Best Western affiliate in 25. Hotel Trading Performance The mid-market sector provides the most rooms and achieved the highest occupancy 61% in 24. However, one has to take into consideration that more than 5% of the midmarket hotels have an average of 28 rooms. Even so, the mid-market hotels outperformed the upscale market by 25 percentage points of occupancy in 24. Graph 4 shows the performance of the upscale and mid-market hotels in Zagreb between 1997 and 24. Preliminary 25 figures suggest a growth in occupancy and average rate on 24 levels. Graph 3 Zagreb s Room Distribution According to Category Graph 4 Zagreb Upscale Hotels vs Mid-Market Hotels Budget Hotels (7) 8% Mid-Market Hotels (19) 63% Upscale Hotels (3) 29% Occupancy % Upscale Hotels Occupancy ADR RevPAR Source: Ministry of Tourism While there are 19 mid-market hotels the upscale market is represented by only three hotels, which together account for nearly 3% of the total room supply. Westin Zagreb (45 rooms) Sheraton Zagreb (36 rooms) Regent Esplanade (29 rooms). Occupancy % Mid-Market Hotels Occupancy ADR RevPAR Source: HVS In-house Library 5

7 Upscale Hotels Market Performance The occupancy of the upscale hotels was relatively stable but significantly very low between 1997 and 23 at around 4%, before a noticeable drop in 24. This was due to the reopening of the Regent Esplanade hotel, which added 23% more rooms to the market. The demand for upscale hotels experienced only limited growth over the period under review and, with the opening of the Regent Esplanade hotel, this new supply was simply not absorbed by the demand. In reality the occupancy was not sufficiently high to warrant another upscale hotel at this time. Mid-Market Hotels Market Performance Occupancy in the mid-market hotel sector is on average around fifteen percentage points higher and increased from 56% in 22 onwards to 61% in 24 despite the opening of two new mid-market hotels the Hotel Arcotel Allegra and the Aristos hotel in 23. Historically, the upscale hotel market has always outperformed the mid-market sector in terms of RevPAR. However, in 24 RevPAR for the mid-market hotels was 5 higher than the upscale market, which reflected the difficult trading environment for the upscale hotels which was exacerbated by the arrival of the Regent Esplanade Hotel. Proposed Hotels We are aware of two projects: The 135-room International hotel, which used to accommodate refugees during the war and needs major renovation, is undergoing a programme of renovation and extension. At the moment the hotel offers only 9 rooms while the top floors are being renovated, but a new extension built next to the hotel will offer a further 1 rooms. The extension and renovation work is expected to be completed by summer 26. The hotel has an excellent location next to the City Hall, the National Library and the Zagreb Trade Fair. We understand that once the renovation is complete the hotel will be of four-star standard and will feature 235 rooms, a casino and a fitness centre. We understand that neither hotel is currently linked to an international brand, but that different international hotel operators have recently shown interest in the market lately. However unless the demand for hotel accommodation in the city can be radically improved, marketwide occupancy levels will be hit leading to lower room rates as hoteliers strive to shore up their fortunes. We advise hotel developers to proceed with extreme caution and hoteliers to concentrate on building new sources of demand to enable existing hotels to remain solvent. Dubrovnik City Overview Dubrovnik is the main port and tourist centre of the southern Croatian coast. It has a population of approximately 5, and its economy is based on tourism and seafaring. The town has a number of cultural and educational institutions and lies at the foot of Limestone Mount (412 m high), in a valley bordered to the southwest by the Lapad plateau. The climate of Dubrovnik is characterised by warm, dry summers and mild winters. Southeast of the old part of the town is a tourist zone called Ploce (hotels and beaches), west of it is Lapad (sports facilities, hotels, beaches and walking trails), while to the northwest is Gruz Port and Gruz. The port of Gruz is a trading port, situated 2.5 km northwest of the ancient town centre of Dubrovnik. Dubrovnik has maintained its important position in Croatian culture. It is known as a town of political and cultural history and one of the most famous cities of the Mediterranean included on the list of World Heritage Sites by UNESCO. Its geographical isolation, at the extreme southern end of the country, is compensated for by high traffic and communication links especially via air and fast hydrofoil boats. Road networks are being improved through new highways, notably one linking Zagreb to Split, which was completed in 24. The highway that will connect Zagreb with Dubrovnik is due for completion by the end of 28. Dubrovnik benefits from many tourist attractions and has a number of old churches, monasteries, museums and hotels scattered 6

8 around the town. Its coastal belt is adorned with several marinas, piers and promenades. The artistic life of Dubrovnik is characterised by numerous exhibitions taking place throughout the year, such as the Art Gallery, which is one of the city s most important annual exhibitions. Despite the numerous exhibitions that are held in Dubrovnik, the town currently lacks a proper conference and exhibition venue. There are rumours, however, about the development of a multipurpose meeting and exhibition hall. It is suggested that such a development could be ready by 29. Airport Arrivals Table 3 illustrates the total number of passengers using Dubrovnik airport from 1994 to 24. We note that Dubrovnik is also a popular cruise stop. Seasonality The summer tourism season in Dubrovnik starts in June and ends in September. The months of highest visitation are July and August. Dubrovnik is heavily reliant on leisure demand, mainly in the summer months. However, over the last two years there has been a significant growth in tourist arrivals in April, May, September and October, which suggests that there is a growing interest in Dubrovnik as a meeting and conference destination, despite the lack of proper facilities. Graph 5 illustrates the seasonality of visitation to Dubrovnik compared to Croatia as a whole and indicates a broader season in Dubrovnik than is exhibited for the rest of the country. Graph 5 Seasonality of Arrivals in Dubrovnik vs Croatia in 24 Table 3 Airport Passenger Movements for Dubrovnik (s) Total % Overseas Domestic Overseas Domestic Year Passengers Change Passengers % Change Passengers % Change % Share % Share % 39.3 % % % 14-5 % Growth % 319% 44% Compound Annual Growth Rate % 27.% 6.2% Dubrovnik 16, 14, 12, 1, 8, 6, 4, 2, January February March April May Dubrovnik June July August September October Croatia November December 3,, 2,5, 2,, 1,5, 1,, 5, Croatia Source: ACI Worlwide Airport Traffic Dubrovnik airport is approximately 2 km east of the town. Given the location of Dubrovnik, most arrivals to the city come through the airport, whereas the southern part of the city is easily accessible by car from neighbouring countries. Total international passenger movements at Dubrovnik airport have grown at a compound annual rate of approximately 27% since 1998, in comparison to 6% CAGR in domestic passengers for the same period. An exceptional growth in overseas passengers of 157% was registered in 2. Albeit this followed a sharp fall the previous year (-33%) Additionally, there has been a strong growth of 42% and 32% in 23 and 24, respectively. This growth is attributed largely to an increase in charter and scheduled flights from many European cities. Source: Croatia Tourism Bureau Dubrovnik Hotel Market There are currently some 3 hotels in Dubrovnik with approximately 4, rooms. Only five hotels (or 16% of total hotel room supply) are in the five-star category: the Hilton Imperial, the Dubrovnik Palace, the Excelsior Dubrovnik, the Grand Villa Argentina and the Pucic Palace. The remaining hotels are mostly three-star or bed and breakfast establishments. The first international hotel to open in Dubrovnik was the 147-room Hilton Imperial, which opened in May 25. Arrivals at Dubrovnik hotels grew by 74% between 2 and 24, with international arrivals accounting for 87% of total arrivals in 24. Room nights in Dubrovnik hotels grew by 42% from 22 to 24 and by 19% from 22 to 23 and 23 to 24, while arrivals in Dubrovnik hotels increased by 47% from 22 to 24. 7

9 The average length of stay remained unchanged between 22 at 24 at approximately four nights per visit. Graph 6 25, 2, 15, 1, 5, Tourist Arrivals 4, 35, 3, 25, 2, 15, 1, 5, Room Nights and Arrivals in Dubrovnik Hotels Room Nights in Dubrovnik Hotels % Change 22-4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Arrivals in Dubrovnik Hotels Tourist Arrivals % Growth Graph 7 shows the operating performance of the main four-and five-star hotels in Dubrovnik. Graph 7 Occupancy (%) Average Rate and RevPAR of Four-Star and Five-Star Hotels in Dubrovnik 22-4 RevPAR ADR Occ New Developments There is an increased investment appetite in the Dubrovnik market with many private investors and management companies trying to identify potential sites in the area. However, we note that the Dubrovnik tourism board is currently prohibiting the construction of new hotels in the city. This law aims to limit oversupply and encourage the redevelopment or renovation of previously destroyed hotels. However, we expect that once redevelopment of the existing hotels is completed, and demand for hotel accommodation grows, the tourism board will consider granting permission for other tourism-related projects. As such, we expect a slow growth in room supply in Dubrovnik in the next three years other than the redevelopments listed below % Growth Average Rate ( ) There are currently several hotels in Plat, Cavtat and Dubrovnik that present an opportunity of being acquired and redeveloped. The 3-room Libertas hotel is due to reopen at the end of 26; The 3-room Placir and 2-room Belvedare hotels, destroyed during the war, are undergoing complete renovation and should reopen at the beginning of 27; A 25-room, four-star conference hotel is due to open at the beginning of 28; A 15-room, five-star spa hotel is due to open at the beginning of 29; A 15-room, luxury five-star hotel in Cavtat, a ten-minute drive from Dubrovnik, is due to be developed. Additionally, a 15-room golf hotel is rumoured as part of a golf course development. Clearly, with so many new developments expected to open, there will be the need for a huge increase in demand to be generated if the existing hotel s occupancy levels and, thereafter, average room rates and profits are not to be decimated. Other Coastal Developments There are other potential developments that have been identified by local and international investors on the islands of Hvar, Vis, Trogir, and Solta. Most of these hotel developments will form part of mixed-use projects featuring marinas, spas, retail outlets and residential units. Although there is no clear time-frame for these developments, it is an indication of the attractiveness of the country and the increase in investor appetite. These investors also appreciate the need to achieve material increases in visitor demand to support these enterprises. Conclusions Both Zagreb and Dubrovnik have witnessed growth in tourist arrivals, room nights and average rate over the last couple of years. While the Zagreb market is currently dominated by Starwood, other hotel brands have recently entered the market. The Zagreb hotel market is likely to benefit from demand for accommodation once the congress centre is built and the extension of 8

10 the airport is finished. These factors, combined with the efforts of the Tourism Office and Convention Bureau to promote Zagreb as a business and a leisure destination, are likely to further increase demand for hotel accommodation. This will be essential, given the increases to hotel supply that are currently underway, if the hotel market in Zagreb is to survive. The Dubrovnik hotel market is likely to benefit from further demand for accommodation once there are more direct flights especially by lowcost airlines flying to Croatia and Dubrovnik specifically. Additionally, the renovation of old hotels and the development of tourism-related projects will further enhance tourism growth in the city. We consider that meeting and conference demand, which is increasing, will grow further once new quality hotels with adequate meeting and conference space and the convention centre are developed. However, increases in demand from other sources will be needed in order to help fill the expanding hotel sector in Dubrovnik. Additionally, the country s accession to the EU that is expected by 21 will enhance Zagreb s and Dubrovnik s attractiveness to foreign direct investment and hence generate much needed additional business demand. About the Authors Hala Matar Choufany is an Associate with HVS International s London office. She joined HVS in January 25, having had four years operational and managerial hotel industry experience and one year of consulting experience in the Middle East. She has also lectured at Notre Dame University in Lebanon on International Travel and Tourism. Hala holds an MBA from IMHI (Essec Business School, France and Cornell University, USA) and a BA in Hospitality Management from Notre Dame University, Lebanon. Since joining HVS, she has conducted numerous valuations (single assets and portfolios), feasibility studies, and market studies and also given strategic advice on mid- and large-scale developments and investment ventures in the Middle East and Europe. She joins HVS International s office in Shanghai from September 26. Sarah Leemann is an Associate with HVS International s London office. She joined HVS in 24, having worked for two years as an analyst for UBS in Switzerland. She holds a degree from Ecôle Hotelière de Lausanne in Switzerland. Since joining HVS International, Sarah has conducted numerous valuations (single assets and portfolios), feasibility studies, and market studies in Europe, Middle East and Africa. For further information, please contact one of the authors: Hala Matar Choufany Associate hchoufany@hvsinternational.com Direct Line: Sarah Leemann Associate sleemann@hvsinternational.com Direct line: Or visit our website on HVS International 26 9