HotelNewsNow.com each week features a news roundup from a different region of the world. Today’s review covers Europe.
Europe hotel performance on the rise
The European hotel industry posted positive results in year-over-year metrics when reported in U.S. dollars, euros and British pounds for May 2011, according to data compiled by STR Global.
Year-over-year, May 2011 figures for Europe (U.S. dollars, euros and British pounds):
| Europe | % change | |
| Occupancy | 71.4% | +5.3% |
| ADR (U.S. dollars) | $150.73 | +26.0% |
| ADR (euros) | €105.54 | +8.3% |
| ADR (British pounds) | £91.51 | +10.5% |
| RevPAR (U.S. dollars) | $107.69 | +32.7% |
| RevPAR (euros) | €75.40 | +14.0% |
| RevPAR (British pounds) | £65.38 | +16.3% |
Source: STR Global
• Read “STR Global posts May 2011 results for Europe.”
Europe transactions gaining steam
Deal volume in Europe had been stymied by a lack of lending, but as liquidity has returned, so have the hotel trades, said Mark Wynne Smith, who leads the EMEA division of Jones Lang LaSalle. Year-to-date through May, the region has noted a 130% increase in transactions, he said.
Two recent, high-profile examples of the warming deals market in Europe: In April, the 192-room Marriott Champs-Elysées in Paris was sold by Union Investment Real Estate to an undisclosed buyer for €215 million (US$310.98 million); and in May, the 83-room Hotel Costes K in Paris was acquired by The Ascott Limited for €65 million (US$94.04 million), according to information provided by HVS.
• Read “After delay, European trades pick up.”
In related news, a total of US$4.7 billion in hotel transactions took place in Europe, Middle East and Africa in the first half of 2011, marking an 84% increase on the same period last year, according to Jones Lang LaSalle Hotels Q2 statistical analysis. Activity accelerated as a result of a marked increase in the number of assets going into administration.
Internos raising first hotel fund
Internos Real Investors is raising €200 million to €250 million (US$281.58 million to US$351.98 million) for its first hotel fund. Jochen Schaefer-Suren, partner and head of hotels and leisure at Internos, is targeting midmarket hotels in “core” European countries including Germany, France and the Netherlands.
Schaefer-Suren said the fund is conservative in making investments. He is shying away from purchases based on future operating performance because the risk is too high, especially with management contracts. He cited a lack of return and market values as other reasons he avoids forward purchases.
• Read “Internos raising first hotel fund.”
Accor doubles down in Spain
Accor is bullish on Spain. The France-based hotel company has 22 hotels signed under contract in the country, and plans to have 100 Spanish hotels by 2012. The group aims to nearly double its existing portfolio with 130 hotels by 2013.
Accor operates 76 hotels in Spain with 9,010 rooms in its Pullman, Mercure, Novotel, Suite Novotel, Ibis, All Seasons, Etap and Formule 1 brands. With 43 properties, Ibis has the biggest brand presence; another 10 are in the works. There also are 11 Etap hotels in the economy hotel market.
• Read “Accor aims to nearly double Spain portfolio by 2013.”
Paris plagued by staffing scourge
The Paris hotel industry is facing high turnover and a lack of skilled labor. More than 50% of young hotel employees in Paris quit their jobs within six months of being hired, creating “a real headache for recruitment agencies and for employers,” said Delphine Gangbes, deputy director of the hotel sector at recruitment agency, Randstad.
While some hoteliers are scrambling to fill empty jobs, others are refusing to play the game of hiring staff with a short-term mindset, instead developing training programs to keep skilled staff onboard for the long term.
• Read “Record high hiring and turnover for Paris Hotels.”
Louvre opens 11 hotels in France
Louvre Hotels Group expanded its French footprint significantly during June and July. The company opened the following 11 new hotels in the country:
• Campanile Reims Centre Cathédrale
• Kyriad Orange Centre
• Kyriad Toulouse Sud – Roques
• Kyriad Toulouse Est – Balma
• Première Classe Istres
• Première Classe Toulouse Nord – L’Union
• Première Classe Colmar Nord – Houssen
• Première Classe Lyon Sud – Vienne
• Première Classe Metz Est – Parc des Expositions
• Première Classe Cherbourg Tourlaville
• Première Classe Marseille – Saint Antoine
Travelodge opened 18 hotels in first half of 2011
It’s been a busy first half of the year for Travelodge, too. The company has opened 18 hotels in the first half of 2011 and is building 43 hotels (4,280 rooms). Twenty-one of these properties are anticipated to open before the end of this year.
Upon construction, these new sites will boost Travelodge’s estate to 540 hotels and 39,957 rooms. These new hotel openings also will create 1,300 new jobs across the country.
Piccadily Hotels enters administration
Piccadilly Hotels, the holding company of the 16 Menzies properties and six Travelodge hotels in the U.K., went into administration earlier this month, according to HVS. Lloyds Banking Group restructured £230 million (US$370 million) of debt in the portfolio, enabling Menzies’ management to buy back the 16 hotels through a new company called Cordial Hotels. The six Travelodges will now be put up for sale. Menzies Hotels was purchased by property developer Robert Tchenguiz and fund manager aAIM in 2006 for £180 million (US$290 million). However, the restructuring of the group means that the Tchenguiz family and aAim will no longer hold a stake in the company.
Kempinski ramps up Europe pipeline
Kempinski Hotels has seven properties under development in Europe. They include:
• Kempinski Grand Hotel Gelendzhik, Black Sea Coast, Russia (opening 2011)
• Kempinski Hotel Cathedral Square-Vilnius (opening March 2012)
• Palais Hansen Kempinski Vienna (opening 2012)
• Kempinski Hotel Nikolskaya-Moscow (opening April 2012)
• Kemeri Palace Kempinski-Jurmala (opening TBA)
• Kempinski Hotel Rustaveli-Tbilisi (opening TBA)
• Kempinski Hotel Belgrade (opening TBA)
Interstate to manage six hotels in Russia
Interstate Hotels & Resorts has been selected to manage six hotels to be developed by NBB-Development in Sochi, a sea and mountain resort area in southwestern Russia and site of the 2014 Winter Olympics. The properties, which will aggregate 1,564 rooms and are expected to open in fall of 2013, comprise a city center business hotel, a golf resort and four hotels in the mixed-use, real-estate development that is an integral part of the infrastructure of the 2014 Winter Olympics.
Deals and development
• The 5-star Four Seasons Hotel in Ballsbridge has been bought by the U.S.-based Livingston Group for an undisclosed sum. Previous owners The Nollaig Syndicate had appointed property consultants CBRE to seek buyers and accepted an offer in early July.
• As part of its ongoing “asset right” strategy, Accor announces the sale of the 396-room Pullman Bercy, in Paris, for €105 million (US$148 million), or €265,000 per key (US$373,117). This price includes €9 million (US$13 million) in renovation work at the buyer’s expense. Accor will continue to run the hotel under a long term management agreement.
• The Newcastle Airport hotel, which has been in administrative receivership since January 2009, is finally set to open in the next few months after a deal was concluded with the Cairn Hotel Group. Newcastle-based CHG already owns and operates 18 hotels in the U.K., primarily in London, the north of England and Scotland. The company will complete the final fit-out of the Newcastle Airport hotel after assuming ownership of the 99-year leasehold interest. The 179-room, 4-star hotel which will open in September under franchise as the Doubletree by Hilton Newcastle International Airport, in northeast England, according to HVS. The sale price is undisclosed.
• Quantum Hotel Group, a new division of the locally-based Quantum Group of companies, has made its first acquisition, according to Yahoo! News. Three hotels, all in a prime location on Bournemouth, U.K.’s Eastcliff, were purchased by the group and have been re-launched following a more than £1-million (US$1.6-million) refurbishment investment. At least 20 new jobs have been created as a result of the purchase.
• Louvre Hotels Group announced that three fully-owned hotels are now incorporated into the Tulip Inn and Golden Tulip brands: the Kyriad Prestige, Roissy becomes part of the Golden Tulip brand; the Kyriad Prestige, Warsaw becomes part of the Golden Tulip brand; the Campanile, Antwerp becomes part of the Tulip Inn brand.
• International hotel operator, Club Quarters, is developing a new hotel and restaurant scheme at Kingsway, London WC2. With an outdoor terrace to Lincoln’s Inn Fields, the 10,000-square-foot restaurant building and 160-room hotel development are on site and due to open early in 2012.
• InterContinental Hotels Group opened its first hotel in Portugal—the InterContinental Porto-Palacio das Cardosas. The hotel, which underwent a US$43-million renovation, is housed within a refurbished 200-year-old palace in the city’s main square.