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LONDON- Madrid; Barcelona; Brussels; Dusseldorf; Frankfurt; Budapest; Cologne and Warsaw are all at risk of an oversupply of hotel space, according to a new survey from Jones Lang LaSalle Hotels. All seven cities are seeing a surge in new development at a time when occupancy levels are falling.

On a conservative estimate, €4.7 billion ($5.3 billion) will be invested in new hotel construction in Europe during the three years to 2005, more than the current market capitalisation of the InterContinental Hotels Group. The report questions whetner the market can support all this new supply.

 Mark Wynne Smith, Managing Director of Jones Lang LaSalle Hotels said: “The constant desire of hotel operating chains to increase market penetration, an expanding pool of capital seeking a more diversified property investment portfolio, and the lack of available (or suitable) product, has led to a marked increase in new development across many European markets, the extent of which has surprised us.”

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