Citing figures from Jones Lang LaSalle, the report says thatglobal hotel investment in 2006 reached $72.5 billion, which was62.9% higher than 2005's hotel transaction volume. Approximatelyhalf of that investment was placed outside of the US, and thatamount is expected to grow, the report said, based on thesignificant portfolio of transactions that occurred in the firsthalf of 2007.

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About one-third of the companies that responded to the Ernst& Young survey, which polled more than 300 investors andindustry executives worldwide, invest in hospitalityinternationally. However, more than 46% of respondents reportedthat they anticipate focusing more on internationalopportunities.

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Of those surveyed, 22% are currently investing in Europe and 15%believe Europe to have the greatest potential for hospitalityinvestment. Asia, however, was believed to hold the greatestpotential by 41% of investors, though 19% currently heldinvestments there. With both China and India opening their marketsto foreign investment, a growing scarcity of higher quality offacilities in the region and double-digit returns, the stage is setfor Asia to become a major investment center in coming years, thereport finds.Also of interest, Latin America edged out Europe inthe investor popularity poll. Investment in the Middle Eastcontinues to grow, particularly in the luxury segment and thosewith mixed-use components, such as in Dubai and Abu Dhabi.

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Of the respondents who indicated an interest in internationalinvesting, 33% would seek opportunities in upscale segments.Investors appear to be more interested in properties which attractmore international travelers and rely less on local markets.

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Investing overseas is not without its perceived risks, however.Respondents to the survey believe the biggest downside forinvestment globally remains the potential for political instabilityin developing markets. However, some of this concern is also beingmitigated by the enormous growth potential perceived to exist inkey markets outside the US. Economic stability ranked second inpotential downsides followed closely by currency instability. Alsoof concern was terrorism and barriers from local legislation.

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These risk factors are offset by the potential upside thatinternational hospitality investments offer, the report found. Thebenefits include: growth potential, which 38% of respondentsidentified; abundance of opportunity, 24%; higher returns oninvestment, 24%; and risk diversification, 14%. "Many of theseprovide the rationale for Asia being perceived as offering thegreatest potential for international hotel investments, given Chinaand India's rapid economic expansion, increased transparency, andeasing of restrictions on international investment," the reportsays.

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