Impact of Economic Factors on the Hotel Industry for 2012 Predicted

Here’s a response to this article, which was posted back in February of this year: http://www.hotelnewsnow.com/Articles.aspx/7463/Economic-factors-will-affect-hotel-investment.  It mentions various factors that the author believed will affect the hotel industry this year: U.S. monetary policy, the European Union debt crisis, Chinese GDP growth, and the price of oil.

Of course we all know that the industry is very dependent on macroeconomic factors that are out of anyone’s control, as the author points out. I can understand how U.S monetary policy affects them because it affects everyone and that at a macroeconomic level, the price of oil would affect whether or not people want to travel. But I am having a hard time understanding how the European debt crisis affects the hotel industry in particular. Here’s why: 

- It says “Given the unsustainable sovereign debt situation in Europe, fewer commercial real estate loans will be made in the U.S. by foreign banks in 2012. This presents an opening for U.S.-based balance sheet lenders to ramp up lending and greatly expand their market share.” So if Europe doesn’t lend us money, then US banks will since it’s obvious that they will want to take advantage of this opportunity. So then how would the EU debt crisis affect the hotel industry here? Obviously this statement implies that most of the foreign banks that make loans to the U.S are from Europe. Why are all of them from there? 

- “Additionally, the Association of Foreign Investors in Real Estate (AFIRE) reports that more than 60% of its members view the U.S. as the best market for capital appreciation. Since most of Europe finds itself in financial distress and Asian markets have not met expectations, the U.S. presents itself as a very promising and stable venue for offshore capital. Hotels, especially those in gateway markets, will be very attractive to international capital seeking a safer haven.” Maybe the author is trying to explain how the EU debt crisis affects the U.S hotel industry, but I still do not understand how it does. It’s easy to understand why foreign investors think that the U.S is a safer place to invest in, but why would they want to invest in hotels in particular?