As Europe’s hospitality investment cycle stretches into its ninth year, investors may find less availability of bank lending for developments, according to a new survey from HVS Hodges Ward Elliott.

The European Hotel Lending Survey 2018 reported that, over the past year, cautiousness due to increased political risks and economic policy challenges had been replaced with a more positive outlook for hotel lending. Strong hotel performance meant that debt continued to be available in most regions, with hotels proving a popular alternative real estate asset class, with increasing interest from investors.

The study came as a “barrage” of investors exiting the UK at the end of last year was taken as a sign that the industry had reached the top of the market cycle.

The survey of leading banks active in hotel financing revealed, however, there was less financing available for developments than other projects, with the banks’ perception being that the market was at a more mature phase in the cycle. As such, lenders are concerned about oversupply, particularly in Western Europe.

The survey found that the average loan size from major international banks started to decrease slightly as the market matured, although those from smaller regional lenders had shown less change.