HotelNewsNow.com each week features a news roundup from a different region of the world. Today’s review covers Europe.
Europe performance for May
The European hotel industry posted mixed results in year-over-year metrics when reported in U.S. dollars, euros and British pounds for May 2012, according to data compiled by STR Global, the parent company of HotelNewsNow.com.
Diamond Jubilee boosts weekend performance
The Queen’s Diamond Jubilee fueled significant gains in London during the Saturday and Sunday of the four-day affair in the beginning of June. Hotels in the city saw occupancy reach 90.5% on 2 June and 79.3% (up 20.8%) on 3 June, a traditionally low Sunday night, according to STR Global. Saturday and Sunday also saw RevPAR increases to the tune of 8.3% and 23.5%, respectively.
The rest of the week (4-9 June), on the other hand, was more challenging for hoteliers as leisure visitors replaced the traditional corporate business base. London hotels saw the biggest drop Tuesday with occupancy declining by 38.9% to 57.6% compared to the previous year.
UK hoteliers call for VAT reduction
The British Hospitality Association and industry leaders continue to lobby to reduce the U.K. tourism sector’s 20% VAT to 5%, a plea ignored by Chancellor of the Exchequer George Osborne in his annual budget released in March. Deloitte research shows the cut could generate 79,000 jobs and contribute an additional £2.6 billion ($4 billion) to the Exchequer over the next decade.
“For example, with hotel accommodation France has 7%, Spain has 8%, Germany and Italy have 10%. This not only makes U.K. prices that much higher and less competitive, thus discouraging incoming travel, but (it) makes hotel prices in Europe less expensive for British people, thus encouraging outbound travel,” said Ufi Ibrahim, chief executive of the BHA.
Europe global pipeline
The Europe hotel development pipeline comprises 895 hotels totaling 143,998 rooms, according to theMay 2012 STR Global Construction Pipeline Report.
Among the chain-scale segments, the upscale segment accounted for the largest portion of rooms in the total active pipeline with 20.8% and 29,996 rooms, followed by the unaffiliated segment, representing 20.6% of rooms in the total active pipeline with 29,701 rooms. The midscale segment made up the smallest number of rooms in the total active pipeline with 6.5% and 9,349 rooms.
Scandinavia remains elusive to global chains
As international hotel chains look to expand their portfolios throughout the globe, the Scandinavian market has remained largely elusive, with regional operators dominating the landscape and domestic travelers staying loyal to homegrown brands.
Analysis from Nordic Hotel Consulting conducted exclusively for HotelNewsNow.com reveals little to no presence from major chains Hilton Worldwide, InterContinental Hotels Group, Marriott International, Hyatt Hotels Corporation and Choice Hotels International, among others. Only Best Western International has a foothold—the Phoenix-based hotel group has approximately 130 properties throughout Denmark, Norway and Sweden.
Sofitel gains ground after metamorphoses
Accor’s luxury Sofitel brand is gaining ground in the luxury market after a self-cleansing process that shed 52 hotels from the system and moved an additional 60 to other Accor brands. Sofitel has opened 30 hotels since then, including nine this year. The brand has 120 hotels comprising approximately 31,000 rooms in its portfolio.
Deals and development
- IHG opened two new properties in London in the build-up to the Olympic Games. The hotels include the Holiday Inn London Stratford City and the Staybridge Suites London - Stratford City. The two hotels are owned by a joint venture between Cycas Hotel Partners and Patron Capital. The hotels are operated by Cycas Hospitality under a franchise agreement with IHG.
- IHG also announced two pending additions to its Hotel Indigo portfolio: In late May the group signed its first Hotel Indigo in Wales; later this month it will open the Hotel Indigo Newcastle.
- New-York based hospitality management firm Morgans Hotel Group Company is bringing its Hudson brand to Europe. As part of an expansion plan for the brand across global gateway markets, Morgans has signed a 20-year management contract for a 200-room Hudson hotel in London, which is expected to open in 2015.
- Accor opened its first Mercure hotel in Russia. The 109-room Mercure Arbat Moscow is owned by ARD and is operated by Accor.
- Marriott announced plans to open a second hotel in Bucharest, the 147-room Courtyard by Marriott Bucharest. The hotel will operate under a management agreement with Gica Popescu Hotels SRL and is expected to open in early 2014.
- The Rezidor Hotel Group announced the Radisson Blu Hotel, Kyiv Podil in Ukraine. The 163-room property is scheduled to open during the fourth quarter of 2012.
- Rezidor earlier in the month opened its first hotel on the Spanish holiday island of Gran Canaria: the Radisson Blu Resort, Gran Canaria featuring 189 rooms.
- Best Western opened its first Plus hotel in Moldova, the 40-room Best Western Plus Flowers Hotel, located in Chisinau.