Global Hotel Pulse: Europe News

HotelNewsNow.com each week features a news roundup from a different region of the world. Today’s compilation covers Europe.

STR Global: Europe hotel performance shows improvement

The European hotel industry posted generally favourable results in year-over-year metrics when reported in U.S. dollars, euros and British pounds for April 2010, according to data compiled by STR Global.

Source: STR Global “Demand for European hotel rooms continues to improve. With a relatively flat increase of new supply across the region, we saw occupancies and average room rates picking up against weak results in early 2009,” said Elizabeth Randall, managing director of STR Global. “Europe continues on its path of recovery with European RevPAR for the first four months of this year being (US)$6 higher than year-to-date 2009, but (US)$26 lower than year-to-date 2008.”

Hotel rates in Europe have dropped for the first time since the beginning of the year, according to the trivago Hotel Price Index. This seems to mark the beginning of price stabilization, following an uninterrupted five-month rise in prices since January 2010.

In June, the price of an overnight stay in a standard double room in Europe fell to 97 pounds (US$142). This represents a drop of 6 percent in comparison to last month’s average of 103 pounds (US$150), and arrives just in time for the beginning of the summer travel season. In 38 of the 50 cities listed in the tHPI for June, prices fell or remained steady, suggesting hotel prices are beginning to stabilize after a prolonged trend of rising prices in 2010.

Carlson becomes majority shareholder of Rezidor

Carlson, a privately held, global hospitality and travel company, acquired additional shares of The Rezidor Hotel Group, listed on the OMX Nordic Exchange in Stockholm. The acquisition brought Carlson’s total ownership of outstanding shares in Rezidor to 50.1 percent.

Hubert Joly, president, chief executive officer and director of Carlson, said, “We see great value creation potential in Rezidor, and believe that both companies will benefit from continued collaboration on global brand strategies, enhanced customer offerings, revenue generation and consistent global growth.”

Carlson’s relationship with Rezidor dates back to 1994, when the two companies signed a master franchise agreement for the Radisson brand in Europe, the Middle East and Africa. Subsequent agreements expanded Rezidor’s franchise rights to include the Carlson brands of Country Inns & Suites by Carlson, Park Inn and Regent. Carlson acquired 25-percent ownership in Rezidor in 2005, and increased ownership to 35 percent in 2006, 41.7 percent in 2007 and 44.4 percent in 2009.

Carlson and Rezidor complete Regent sale

Carlson, a privately-owned, global hospitality and travel company, and publicly-held The Rezidor Hotel Group AB announced that the acquisition of the Regent luxury hotel business by Formosa International Hotels Corporation (FIHC) has been completed. The companies announced on 16 April they had signed a master purchase agreement.

Rome considers hotel tax

Rome is considering a hotel tax on the 9 million visitors to the Eternal City each year, a revenue-raising measure that may hurt tourism in the Italian capital and put further pressure on its credit rating, according to Bloomberg Businessweek.

Prime Minister Silvio Berlusconi’s government proposed the levy to reduce the €500 million (US$600 million) it contributes annually to help Rome control €9.6 billion (US$11.5 billion) of debt. Italy authorized the initiative in its €24.9-billion (US$29.7 billion) budget-cutting plan, prompting Standard & Poor’s on 27 May to change the outlook on Rome to negative, saying the government was scaling back its commitment to bolster the city’s finances.

Accor plans to sell 450 hotels

Accor SA is planning to sell 450 hotels between now and 2013 as part of an ongoing portfolio restructuring.

The sales, which are expected to increase cash by €1.6 billion (US$2 billion) represent more than a quarter of the company’s 1,600 hotels. On a normalized, annual basis, the property sales will result in a reduction of revenue by €150 million to €200 million (US$183 million-US$244.1 million).

Adjusted net debt is expected to be reduced by €200 million to €300 million (US$244.2 million-US$366.3 million) a year as a result of the transactions.

“The asset management program is designed to encourage the use of asset-light ownership structures in order to reduce capital employed and attenuate earnings volatility,” the company said in a statement.

• Read “Accor plans to sell 450 hotels."

HVS franchise fee guide

Most hotel lenders consider that to be competitive in today’s hotel market, a strong brand affiliation is virtually essential. But taking on a franchise is a complicated investment. Selecting an appropriate franchise for a property entails exhaustive research and investigation by an investor/owner.

To help get that investigation under way, Mara Eisenbaum and Sophie Perret of HVS compiled the 2010 Hotel Franchise Fee Guide for Europe. The report finds that a franchise may cost between 4 percent and 6 percent of total hotel revenue (though this number is a based on a select sample and should be treated as a broad indication only).

• Read The Hotel Franchise Fee Guide – Europe.

Wyndham buys Tryp brand

Wyndham Worldwide announced that its Wyndham Hotel Group business unit agreed to acquire the Tryp hotel brand from Sol Meliá Hotels & Resorts. In addition, Wyndham will enter into a license agreement with the current 91 Tryp hotels located throughout Europe and South America that will continue to be owned, operated, managed or licensed by Sol Meliá. The brand, expected to be renamed Tryp by Wyndham, is a select-service, midmarket brand representing approximately 13,000 rooms and caters to business and leisure travelers in cosmopolitan cities including Madrid; Barcelona, Spain; Paris; Lisbon, Portugal; Frankfurt; Buenos Aires, Argentina; Sao Paulo, Brazil; and Montevideo, Uruguay.

Accor announces new brand

Accor has decided to reposition Suitehotel within the Novotel brand. The new Suite Novotel brand to be launched this summer will leverage the strategic fit between the merged brands and will benefit from the power of the Novotel brand already present in 60 countries.

Park Inn gets a new name

The Rezidor Hotel Group announced a new name for its midmarket brand Park Inn: With immediate effect, Park Inn becomes Park Inn by Radisson.

"This new name is in line with our decision to strongly focus on the development of our two core brands. Park Inn is a young brand which we launched in early 2003 only and brought to over 140 hotels with over 26,000 rooms in operation and under development across EMEA. The link with Radisson and its great strength and reputation will allow Park Inn to grow even faster and to be even more efficient. We are also confident that this brand endorsement will further increase the brand awareness for both Park Inn and Radisson," said Kurt Ritter, the company’s president and CEO.

Openings, development and transactions

Etap opened its flagship hotel in Belgium, the Etap hotel Bruges Center. The 184-room property is situated in a commercial and residential site next to the railway station and a 10-minute walk from the famous Beguniage.

The Doxford Hall Hotel and its 10-acre estate, in Northumberland, north England, has been sold by owner Newcastle-born millionaire Brian Burnie to Robert and Gina Parker for around £9 million (US$13.3 million).

Starwood Hotels & Resorts recently opened its second Sheraton-branded property in Georgia: the 202-room Sheraton Batumi. The hotel was constructed in the city of Batumi, on the shore of the Black Sea in the southwest part of the country, by Turkish group Nurol Holding for a reported investment of approximately US$65 million. The hotel joins its sister property the 140-room Sheraton Metechi Palace Hotel, in the capital Tbilisi.

Starwood and Arabella Hospitality Group will open the Westin Hamburg Hotel during 2012 as part of the Elbe Philharmonic Hall complex, which is under construction.

Starwood’s select-service Aloft brand will open its first London property in time for the 2012 Olympic Games, with a 252-room hotel attached to the Excel exhibition and conference centre.

Starwood Hotels & Resorts opened its seventh Luxury Collection Resort in Greece. Starwood teamed up with mixed-use resort developer TEMES to develop The Romanos, A Luxury Collection Resort.

Thompson Hotels will open the 85-room Belgraves in London during the summer of 2011. Thompson will manage the property, which is owned by Hong Kong-based Harilela Group.

The Grosvenor Victoria in London is about to undergo a facelift. The 357-room property will close for a year-long renovation before being rebranded. The property will become Guoman Hotel Management’s fifth property in the U.K.

ABBA has signed the sale and leaseback of the four-star ABBA Castilla Plaza, in Madrid, according to Esther Gladen of HVS Madrid. The 228-room property was sold to a group of Spanish private investors led by Grupo Milenium for €33 million (US$40.4 million), a yield of more than 7 percent.

UK-based budget hotel brand Travelodge is to invest £62.4 million (US$92.0 million) in the development of 13 new hotels. Four of these properties will be in London and the rest will be developed in other cities and towns across England. Once open, these hotels will add another 1,224 rooms to Travelodge’s portfolio.

The Travelodge Bournemouth Seafront Hotel was bought by Aviva Investors, the asset management business wholly owned by insurance group Aviva, for £6.9 million (US$10.2 million).

Hilton signed a franchise agreement with U.K.-based Brayford Hotels for a new Doubletree hotel in the city of Lincoln, in east central England. The 115-room Doubletree by Hilton, Lincoln will be built on the site of a former electricity power station and it is expected to be completed by the end of 2011.

Kempinski Hotels has opened the Kempinski Hotel River Park Bratislava, its first property in Bratislava, southwestern Slovakia.

Courtyard by Marriott opened the Courtyard Budapest City Center under a long-term management agreement with Ablon Group Limited and the Courtyard St. Petersburg Center West/Pushkin Hotel under a long-term agreement between Marriott International and OOO Stroiprogress.