Global Hotel Pulse: Europe News

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

Europe results for June
The European hotel industry posted positive results in year-over-year metrics when reported in U.S. dollars, euros and British pounds for June 2011, according to data compiled by STR Global, sister company of HotelNewsNow.com.

Source: STR Global

“Europe continued with its solid performance for the first six months of this year”, said Elizabeth Randall, managing director at STR Global. “Across the region we saw equal increases in occupancy and (average daily rate), resulting in a 9% (revenue-per-available-room) increase. Despite the reoccurring uncertainties in the wider economic environment, European hoteliers benefitted from the continued improvement in business, (meetings, incentives, conventions and exhibitions) and leisure demand”. 

Libyan war keeps some Italian hotels empty
The ongoing conflict in Libya is keeping tourists from the southern shores of Italy. The island of Lampedusa in particular, which has hosted thousands of Libyan refugees, has seen demand suffer, according to Christian Del Bono, president of the hotel association.

Lampedusa is ready to host tourists, but “(tourists) do not want to come. … Tour operators didn’t stop selling Lampedusa, but there is no demand,” he said.

The impact on the local hotel industry is extremely negative, according to hoteliers.

“All the hotels are crying because of the consequences of what has been the ‘occupation’ of Lampedusa,” said Mario Liberatore, deputy GM of Grand Hotel del Sole in Lampedusa. “(Our) few guests are direct guests. They tell us people in the North have in their eyes the images of Lampedusa occupied (by the migrants).”

Liberatore said the island destination is facing a severe contraction of bookings, losing approximately 80-85% of business.

Read “Libyan war keeps some Italian hotels empty." 

July Europe pipeline
The Europe hotel pipeline includes 800 projects comprising 130,260 guestrooms, according to the July STR Global pipeline. There are 58,098 rooms under construction.

New World Hospitality eyes management companies
New World Hospitality Hotel Management Company plans to spend US$1.1 billion to double its hotel portfolio in the next five years, according to the South China Morning Post. The company, which is the hotel management arm of New World Development Company, is seeking to buy hotel management companies that would help it expand its footprint in Europe and in gateway cities on the mainland, despite uncertainties over the economic outlook in the United States and Europe.

IHG appoints new CFO
InterContinental Hotels Group PLC appointed Tom Singer to the Board and Executive Committee as chief financial officer, effective 26 September 2011. Tom takes over the CFO role from Richard Solomons, who became chief executive on 1 July 2011, and joins IHG (www.ihg.com) from global healthcare group BUPA where he has been Group Finance Director since 2008.

Deals, developments and openings

• Starwood Hotels & Resorts Worldwide signed an agreement with Amrey Hotels s.l. to operate a Four Points Hotel in Barcelona. The Four Points by Sheraton Barcelona Diagonal will open this fall marking the entry of Starwood's Four Points brand into Spain.
• Marriott International’s Autograph Collection brand will be adding to its roster six hotels in Europe. The hotels are part of the Italian-owned Boscolo Hotels chain and will use Marriott’s reservation system and brand while remaining independently owned and operated. In September, Marriott will rebrand the 87-room Boscolo Palace Roma in Rome; the 72-room Boscolo Venezia in Venice, Italy; the 152-room Boscolo Prague; and the 185-room Boscolo Budapest in Hungary. The 238-room Boscolo Exedra Roma in Rome and the 154-room Boscolo Milano in Milan, Italy, will follow suit in 2012.
• Whitbread exchanged agreements with LaSalle Investment Management for the sale and leaseback of seven properties operating as Premier Inns and adjacent restaurants. On completion, which is expected by September 2011, LaSalle will pay £53.8 million (US$88.1 million) in cash for the properties and enter into 25-year leases with Whitbread, who will continue to operate the properties. This represents a net initial yield of less than 5.5%.
• Accor announced the sale of the Sofitel Arc de Triomphe in Paris, under a sale-and-management-back arrangement, based on an enterprise value of €69 million (US$98.9 million), or €556,000 per room (US$797,092). The hotel will be sold to a consortium of French private investors for €44 million (US$63.1 million). The buyer committed to financing renovation work for an additional €25 million (US$35.8 million). The hotel will remain open while the work is being carried out.
• Accor opened the Kalidria & Thalasso Spa Resort in Castellaneta, Italy, a new hotel in a natural setting for MGallery. The hotel has 110 rooms including 10 suites to welcome guests in search of wellbeing and relaxation.
• European hotel chain Kempinski Group is to open the Kempinski Hotel-Badamdar in Baku, Azerbaijan, in September 2011. According to Kempinski, the new property is one of the group's two signed management agreements in the Azerbaijani capital: the Kempinski Hotel Crescent Baku will open in 2015.
• The Eden Hotel Collection has increased its portfolio of upscale hotels in the U.K. to five with the purchase of the Brockencote Hall hotel near the town of Kidderminster, in west central England, from Joseph and Alison Petitjean for more than £3 million (US$4.9 million). The 17-room Victorian country house hotel, which has been owned by the Petitjean family since 1985, will now undergo an extensive renovation to bring it in line with Eden standards.
• Warimpex, Europa Fund II and George Mula agreed to sell their 100 % interest in the Sobieski Hotel to the Norwegian investment company Wenaasgruppen which specializes, amongst other activities, in hotel properties and asset management. The sale price agreed was in excess of €50 million (US$71.7 million).
• Meliá Hotels International announced the opening of its sixth hotel in Bulgaria. The Sol Marina Palace is a 4-star resort with 128 rooms located in Nessebar.
• Meliá also announced the addition of a 5-star hotel in Genoa, Italy, to its portfolio to open on 4 September. It is the third hotel operated by the company in the country. Meliá has signed a total of 11 hotels so far this year.
• Hyatt Hotels Corporation announced that a Hyatt affiliate entered into an agreement with Yug – Novy Vek, a subsidiary of leading Russian real estate developer Snegiri Development, to manage Hyatt Regency Sochi, which is under construction and expected to open in late 2013 in Sochi, Russia, host of the 2014 Olympic Winter Games.
• Hyatt also announced a Hyatt affiliate signed an agreement with SIGNA Holding Group to manage Park Hyatt Vienna, which will be located in the city’s renowned Innere Stadt, or First District.  One of 14 Park Hyatt hotels under development worldwide, Park Hyatt Vienna, upon opening, will become the seventh Park Hyatt hotel in Europe and the first Hyatt-branded hotel in Austria.
• Best Western International added the company’s first hotel in Russia, the Best Western Vega Hotel & Convention Centre, in the country’s capital city of Moscow. With 970 guestrooms, the hotel is the largest hotel in Best Western’s portfolio of more than 4,000 hotels worldwide. 
• North Wales-based hotel group Llangollen Hotels is now for sale after falling into administration with its parent company, family run Global Investments Group, according to HVS. Llangollen Hotels owned seven leasehold and freehold hotels in north Wales and northwest England. It is reported that one of the three leasehold properties has now closed and the other two are being operated by their landlords.
• Scandic opened a new 240-room hotel at Forus, just outside Stavanger in Norway.
• Frankfurt, Germany-based Romantik Hotels & Restaurants has recently opened its first hotel in the country, according to HVS. The 35-room Romantik Hotel Château de Schengen, with its original 13th-century tower, is 30 kilometers from the city of Schengen, on the banks of the River Moselle. Romantik now has a presence in 12 European countries.
• Uría Menéndez advised Grupo Millenium in the acquisition from Grupo Hesperia of the Hotel Hesperia Madrid located at Paseo de la Castellana, 57. The transaction was structured through a sale-and-lease-back and closed for a purchase price of €80 million (US$115.1 million) and the subsequent execution of a lease agreement with Hesperia for a 15-year term.
• Dublin-based Castle Hotel Group bought the Fisher’s Hotel in Pitlochry, central Scotland, from LaSalle Investment Management for £3 million (US$4.9 million), according to HVS. As well as taking over the management of the property from Edinburgh-based Crerar Hotels, Castle now plans to invest a further £3 million in the 130-room hotel in order to upgrade it to four-star standards; 80 rooms are currently closed for refurbishment.
• The Pearse Hotel Dublin (formerly the Holiday Inn Dublin City Centre) is on the market and for sale by a private treaty (on the instructions of the joint receivers David Hughes and Luke Charleton, Ernst & Young – Citywide Leisure Limited in receivership).