Market Slowdown: Time for Hotel Acquisitions?

Analysis

Major mergers and acquisitions often take place during periods of market slowdown, where the purchase price for the assets in question, be it shares, real estate or an operational business, is favourable and acquisition opportunities are more diverse.

From a potential buyer's perspective, any slowdown of the market in general, and for the hospitality market in particular, presents a positive opportunity.

By way of example, the last 18 months have seen a particularly active time in Dubai for hotel acquisitions. The hotel industry particularly within the Emirate has matured, stabilised and become internationally established. For any investor considering a hotel purchase, this article sets out the recommended steps to be taken (and risks to avoid) from a legal perspective.

Legal Due Diligence

Should an investor underestimate the importance of legal due diligence, focussing only on financial analysis, the repercussions may be grave.

The scope of the legal due diligence is important, in order to reveal not only existing and potential legal risks, but also any risks related to: