The eastern European hotel market is set to claim more ground from its western European rivals in the competition for guests and market activity this year, while London can expect a boom in new hotels ahead of the 2012 Olympic Games.

According to hotel investment group Jones Lang LaSalle (JLL), the popularity of eastern Europe as a travel destination could see a clear shift in investment towards the former eastern block.

Commenting on a JLL report which surveyed 2,000 investors and owners of hotel and resort properties around the world, Mark Wynne-Smith, European chief executive officer for JLL, said: “Eastern European hotel markets such as Prague and Moscow are tipped to rival some of the well established western European cities for growth in 2006.”

Wynne-Smith said that the strongest sentiment for the hotel market in Europe remains for owners to hold onto their assets, despite the tourism industry coming under pressure from a number of external issues in recent years, including concerns over the war on terror.

“Europe’s recovery is likely to be gradual but investors are still confident about the trading outlook in London, Paris, Rome and Amsterdam” said Wynne-Smith.

According to the report, the prospect of hosting the Olympic Games in 2012 has seen ‘sell’ intentions among hotel owners and investors with assets in London fall dramatically, while ‘build’ intentions for new hotels in the city have grown by around 17 per cent.

Other UK cities to benefit from the successful Olympic bid include Birmingham, which has been tipped for short-term growth among many investors.

Picture: Gran Hotel Son Julia in Mallorca, Spain, owned by The Stein Group – which operates 11 luxury hotels in Europe. The group is just one of the hotel chains to have recently expanded in Europe.