HotelNewsNow.com each week features a news roundup from a different region of the world. Today’s review covers Europe.
Europe hotel industry reports mixed results
The European hotel industry posted mixed results in year-over-year metrics when reported in U.S. dollars, euros and British pounds for August 2012, according to data compiled by STR Global, sister company of HotelNewsNow.com.
Tough conditions continue across Italy
Italian hoteliers reported mixed revenue-per-available-room results through July, according to STR Global. Sicily’s Taormina & Messina market led RevPAR growth and is one of four markets to report increases year on year.
“Whilst Italy has been working toward its economic recovery plan, hoteliers will be looking at signals of improvement, particularly with regards to stimuli for future demand growth,” Elizabeth Randall Winkle, managing director at STR Global, said in a news release. “Our latest forecast for Rome and Milan predicts declining demand in the two markets for year-end 2012, which will negatively affect occupancy for the rest of the year. For 2013, occupancy is forecast to remain weak, with more positive news for average room rates. However, the market situation for the two markets and the rest of Italy remains volatile.”
Poland buoyed by domestic demand
Poland’s strong domestic market provided hoteliers with a certain level of immunity from the ongoing recession, according to panelists during the Hotel Investment Conference Europe.
“Our segment is quite resilient. It’s not perfect, but we maintain occupancy of 70%, and average daily rate is quite stable and returning to higher levels in Warsaw and other key cities. There is a crisis of course, but we feel it less in Poland than in France, Benelux and other European counties,” said Alex S. Kloszewski, partner and hospitality director of real-estate company Colliers International.
But the hotel market’s relative infancy means supply has been slow to ramp up. “If you look at Germany, there are 250 rooms per 10,000 inhabitants. And in Poland, we are at 50 rooms (per 10,000 inhabitants),” Kloszewski said. “Poland is growing, manufacturing is up, exports are always doing very well, internal consumption has had a dip, but that is not too much of a concern. In 2003, there were 350,000 monthly Polish travelers, and today it is over one million a month. Very little of this is leisure. It’s a country that is still growing. Democracy-wise we are only 22 years old, and we have a lot of catching up to do.”
Investment outlook strong for Germany’s ‘big 5’
Germany’s “big five” markets are seeing steady growth in hotel performance and development with no signs of slowing down, according to experts during a panel at last month’s Hotel Investment Conference Europe. The “big five” include: Hamburg, Berlin, Düsseldorf/Cologne, Frankfurt am Main and Munich.
Ulf Templin, managing partner of PKF hotelexperts GmbH, said for the first part of 2012 there had been a RevPAR “increase of around 6% all over Germany.”
“Munich had the highest RevPAR increase of about 8%,” he continued. “Düsseldorf recorded an 11% RevPAR increase, benefitting from a lot of trade shows in this period … Hamburg, Frankfurt and Cologne had a similar RevPAR. Berlin is always at the bottom of the hotel market concerning RevPAR due to low rates in the city.” The outlook for the rest of 2012 is positive, Templin added.
Scandinavia’s hoteliers face opportunities and obstacles
Hotel activity is picking up again in Scandinavia, where strong fundamentals and consumers’ preference for homegrown brands is favoring local investors. Christian D. Kielgast, a partner in Nordic Hotel Consulting, laid out recent improvements in the area’s hotel market.
“Copenhagen (Denmark) was relatively hard hit by the crisis, but 2012 so far has seen 5% to 6% RevPAR growth for the city and new supply coming to the market. Stockholm has started to flatten out a bit; it started recovering in 2010 and is flattening out in 2012. There is still a little bit more supply coming into the Stockholm market, but overall there has (been) a stable 6% increase in roomnights. Oslo (Norway) has seen a bit of a decline this year, around 6% RevPAR, and demand hasn’t grown either. But overall there is new supply coming into the market and I guess we will see performance there start to flatten out.”
Silver linings in the UK
It may be relatively slow going for hotel transactions in the United Kingdom’s hotel industry, but there’s more than a sliver of hope that the worst is behind the market. Four hotel executives during last month’s Hotel Investment Conference Europe said there are many reasons to be optimistic.
“As a buyer, we've been quite active,” said Andy Fish, VP of finance for Westmont Hospitality, a hotel owner and management company, co-headquartered in Toronto and Houston. “Eighty percent of what we're seeing in the market is in the U.K. We like the U.K. at the moment. We think it is two to three years ahead of where continental Europe is at the moment.”
Charlotte Harrington, senior associate with international law firm Baker & McKenzie, said her firm has been doing “quite a lot of work” for companies based in the Middle East that are looking to invest in U.K. hotels. “They’re very interested in markets like London because it's bulletproof (from economic woes) in a way,” Harrington said. “The companies like the big bang properties, the properties everybody knows.”
Rezidor names new CEO
With the retirement of longtime CEO Kurt Ritter at the end of this year, Brussels-based Rezidor Hotel Group named Wolfgang M. Neumann as president as CEO effective 1 January 2013. Neumann currently serves as Rezidor’s executive VP and COO.
STR Global reports September Europe hotel pipeline
The Europe hotel development pipeline comprises 876 hotels totaling 141,554 rooms, according to the September 2012 STR Global Construction Pipeline Report. The total active pipeline data includes projects in the in construction, final planning and planning stages but does not include projects in the pre-planning stage.
Among the markets in the region, Manchester, United Kingdom, reported the largest expected room growth (+29%) 788 rooms in the total active pipeline were to open. Other markets to report a significant expected room growth: Birmingham, U.K. (+19.4% with 2,117 rooms); Moscow (+14.8% with 5,398 rooms); Edinburgh, U.K. (+14% with 1,547 rooms); and London (12.9% with 14,744 rooms).
Deals and developments
- Starwood Hotels & Resorts Worldwide has signed an agreement with Bari Gruppe GmbH & Company KG to open a new-build Element hotel at Gateway Gardens, Frankfurt, Germany`s new city district near the airport. Scheduled to open in 2014, Element Frankfurt Airport will be the first Element in Europe.
- Accor opened its first Pullman in London, the 312-room Pullman London St Pancras.
- October marks a busy month in general for Accor, which is set to open four more hotels in London: the 182-room Novotel Blackfriars; the 297-room Ibis Blackfriars; the 128-room Ibis Shepherd’s Bush; and a new Mercure in the historic Greenwich district.
- Interstate Hotels & Resorts opened the 118-room Holiday Inn Express Utrecht- Papendorp in the Netherlands. The hotel is the fourth to open of a nine-hotel portfolio being developed across the Netherlands. The portfolio is jointly owned by Interstate and TVHG and operated by Interstate under long-term contracts.
- The roll out of InterContinental Hotel Group’s boutique brand Hotel Indigo is gathering pace in Europe, with the company announcing the signing of the first Hotel Indigo for Barcelona and the second in Birmingham, U.K. Located in the center of the city, the 77-room Hotel Indigo Barcelona-Plaza Catalunya will operate under a 22-year franchise agreement with Empresa Casa de Lenguas, S.L. The 61-room Hotel Indigo Birmingham-Waterloo Street will be managed by Rustic Pine Developments Limited.
- Steigenberger Hotel Group will take over operation of a 269-room luxury hotel in Brussels effective 1 January 2013, renaming it the Steigenberger Grand Hotel Brussels. The property currently operates as a Conrad.
- The vice chairman and CEO of Meliá Hotels International, Gabriel Escarrer, and the CEO of the real-estate company WGF AG, Pino Sergio, signed a contract by which Meliá will run a new 205-room hotel in the German city of Hamburg under a lease agreement.
- Hilton Worldwide opened the 119-room Hampton by Hilton York in the U.K.
- DoubleTree by Hilton opened its second property in Romania in Oradea. This is the brand’s first property in Oradea.
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Conrad Hotels & Resorts opened the 154-room Conrad Algarve, located in the Quinta do Lago resort in Portugal.
Compiled by Patrick Mayock.