Hotel sales across the world haven't just taken a hit amid thecoronavirus pandemic but have flat out tumbled compared with lastyear — by half in this year's first five months and by 87% in thesecond quarter.

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Globally 113 hotels sold since April 1 until late June, an 86.7%drop from the 850 hotel sales from last year's second quarter,according to New York-based commercial real estate data andanalytics provider Real Capital Analytics Inc.

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Real Capital cautioned against betting on a market rebound asthe outlook remains gloomy as a result of a still increasing globalinfection rate and decreasing travel demand.

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"The long-term impact of the virus on both tourism and businesssectors is unknown and difficult toforecast," Tom Leahy,senior director at Real Capital's EMEA Analytics, wrote in a June29th report.

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The global demand for flights by passengers is expected to behalved for the year, according to airline trade associationInternational Air Transport Association. Roughly 7.5 millionflights were canceled since the start of the year.

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A closer look shows the US, Europe and Asia Pacific eachexperienced a decline in hotel deals.

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The US experienced a "minuscule" transaction dollar volume fromApril 1 to June 28 with 48 hotels trading for a total $678 million,according to the Real Capital report. In comparison, the averagemonthly volume in the last five years is $2.8 billion.

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In Europe, 36 hotels sold since April 1 yet the dollar volume isbigger than that of the US at more than $1 billion. That's becausethe US saw a drop in the size of assets traded, while Europe loggedsome large hotel sales.

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In the US, the average lot size of the assets traded dropped bya third compared with the five-year average. Europe counts the $270million sale of luxury Bauer Palazzo in Venice among itsbig asset trades. Austria-based investor SignaGroup bought the 210-key hotel for $1.3 million per key, thepriciest hotel trade in the second quarter.

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Still, Europe is grappling with a hotel demand slump as sixhotels sold in June, likely putting the month in history books forhaving the fewest hotel deals on record, according to RealCapital.

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Popular European travel destinations Greece, Portugal and Spainhave said they will reopen for the summer months, which will givemore of a clue whether and how much travel will pick up despite thestill looming coronavirus threat.

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If the Asia Pacific market is used as an indicator, then theoutlook doesn't look significantly brighter in terms ofhotel transactions.

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"Despite the fact the region was the first to experienceCOVID-19 and many of the largest countries have been out of fulllockdown for longer than Europe and US, this has not fed through tosales," Leahy wrote in the report.

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Since April 1, 29 hotels were bought in Asia Pacific with somebig properties under contract suchas Shanghai's the Guoman for a proposed $460,000per key.

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Real Capital cautioned that the sale isn't a done deal untilfinalized as at least three deals fell through since Marchin light of the drop in travel resulting from the pandemic andensuing investor insecurity.

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The World Health Organization reported the global infection ratecontinues to increase, which means stay-at-home andsocial-distancing recommendations remain.

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"With international travel such a driver of hotel occupancy,"the Real Capital report said, "the longer these the persist, theworse the outlook."

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Lidia Dinkova

Lidia Dinkova covers South Florida real estate for the Daily Business Review. Contact her at [email protected] or 305-347-6665. On Twitter @LidiaDinkova.