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.

Europe hotel industry performance shows improvement

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

Source: STR Global “September saw the highest monthly occupancy and average room rate so far for this year,” said Elizabeth Randall, managing director at STR Global. “With 74.8% occupancy and €106.68 (US$149.07 average daily rate), Europe also achieved its highest (revenue per available room) of €79.78 (US$111.48). One has to go back to September 2008 to get a similar RevPAR (€82.86 or US$115.79). As the continued RevPAR recovery gains strength, the outlook looks brighter for the European markets despite the continued risks to the wider economies and the hotel markets.” 

• Read “STR Global: Europe Sept. 2010 results.”

The Carlyle Group acquires B&B Hotels for €480 million

The Carlyle Group on 28 September acquired the B&B Hotel Group, which operates a chain of 223 budget hotels with a total of 16,162 rooms across France, Germany and Italy, from European investment firm Eurazeo for an enterprise value of approximately €480 million (US$667 million).

AmEx forecasts business travel pricing increases

Business travel hotel rates and airfare are expected to increase next year, according to the American Express Global Business Travel Forecast.

Domestic airfare prices in the Europe and Middle East region are projected to increase between 4% and 9%, while prices for international flights are projected to increase between 5% and 9%. Hotel rates in the region are forecast to increase between 1% and 6% for mid-range properties, while rates at upper-range properties are expected to rise between 2% and 6%.

• Read “AmEx forecasts pricing increases for 2011 biz travel.”

JD Power releases Europe Satisfactions results

While overall satisfaction among European hotel guests appears to have remained stable after achieving a 5-year high in 2009, when the benefit of lower guest room rates is removed, satisfaction with the rest of the guest experience declined notably, according to the J.D. Power and Associates 2010 European Hotel Guest Satisfaction Index Study. While these declines occur in three of four hotel segments included in the study, satisfaction in the economy segment has increased.

Overall satisfaction across the industry remains flat in 2010, averaging 745 on a 1,000-point scale, compared with 746 in 2009. In three of the four segments—upper upscale, upscale and mid-scale full-service—satisfaction declined in all measures except cost and fees. Throughout the economic downturn, many hoteliers reduced operational costs amid declining demand and lower rates. After overall satisfaction peaked to a five-year high in 2009, reductions in areas such as hotel staffing and services and deferred investments in facilities have manifested in lower satisfaction scores in these areas in 2010. The economy segment, however, has demonstrated improvement in the areas of guestroom; facilities and services; and costs and fees.

• Read “JD Power releases Europe Satisfaction results.”

Sweden takes the lead across the Nordics

The Nordic countries’ hotel industries outperformed Europe as a whole during the first nine months of 2010, according to data from STR Global. The recovery of the Nordic hotel market after the worldwide economic downturn was evident in the year-to-date September performance results, with the region’s ADR growing 8.5% (in euros) and RevPAR increasing 10.7%. The European average showed higher occupancy growth (5.6%) resulting in a 9.5% RevPAR growth.

• Read “Sweden takes the lead across the Nordics.”

STR Global releases Europe pipeline report

The Europe hotel development pipeline comprises 705 hotels totaling 120,488 rooms, according to the September 2010 STR Global Construction Pipeline Report. The region reported 310 projects in the In Construction phase with 56,582 rooms.

• Read “STR Global: Europe pipeline for Sept. 2010.”

BHA forms partnership with government

The launch of the British Hospitality Association’s Hospitality Economy Partnership at the House of Commons outlined extensive research into opportunities for industry expansion to an audience of BHA members and government representatives, including John Penrose, minister of tourism.

The Economy Partnership is being seen as a written call for the private sector to form a pragmatic partnership with government in order to drive economic growth.

BHA president Sir David Michels said in his opening address: “The prime minister in August laid down two major objectives for the tourism industry. The first was that Britain should be one of the top five tourism destinations in the world and the second is that we should grow the contribution or the amount of money spent by Britons in Britain on hospitality and tourism from 36% to 50%. In response we commissioned Oxford Economics to do some scenario analysis in terms of the future contribution of the industry to understand if the ambitions laid down by the PM could be achieved.”

• Read “BHA forms partnership with government.”

Summer occupancy edges up in Spain

After a disappointing season last year, occupancy at Spanish hotels rose 5% during the summer, with the country’s coastal and island resorts leading in vacationers, according to the Spanish Confederation of Hotels and Tourist Accommodations.

“It is good news, but we saw a disturbing discrepancy between hotels on the coasts and islands which had an average occupancy rate of more than 75%, and in some cases 85%, while hotels in the interior did not on average reach 40%,” CEHAT president Joan Molas said during a news conference.

• Read “Summer occupancy edges up in Spain.”

Acquisitions, openings and development

• Sol Meliá plans to turn the newly acquired City Bank Building in London into ME London. The company paid €133 million (US$185.2 million) for the property and plans to invest another €52 million (US$72 million) to finish off construction and purchase furniture, fixtures and equipment.
• London’s Savoy reopened 10 October after a nearly 3-year renovation.
• The Renaissance St. Pancras Hotel London will officially open May 2011. Marriott International’s upscale Renaissance Hotels arm will manage the hotel under contract with owner Manhattan Loft Corporation.
• Gatwick Airport recently announced it signed a contract with Shiva Hotels Limited to develop a Hampton by Hilton at the airport.
• Hilton Worldwide announced the opening of its latest European hotel and seventh in the United Kingdom, the 127-room Hampton by Hilton Newport/East located at Wales 1 Business Park in Magor in the United Kingdom.
• Hilton also announced three new hotels across Russia: the 270-room Doubletree by Hilton, Moscow Leningradsky-Riverside; the 179-room Hilton Garden Inn Yaroslavl; and the 171-room Hilton Garden Inn Kazan.
• The Rezidor Hotel Group opened the Park Inn Kazan. The brand new mid-market hotel features 151 guest rooms and is in Kazan, the capital of the Republic of Tatarstan.
• Rezidor also announced the Radisson Blu Sortland in Norway, a new-build resort and conference center featuring 168 guestrooms.
• Premier Inn, the U.K.’s biggest budget hotel chain, completed a deal with Soho Estates to bring a new 84-bedroom Premier Inn hotel to Leicester Square.