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.

Blizzard slows holiday travel

Thousands of travelers were either stranded or forced to cancel plans altogether when a third wave of brutal winter weather struck throughout Europe around the Christmas holiday. A total of 650 flights were cancelled at Charles De Gaulle airport in Paris while freezing rain covered some roads in almost an inch of ice, according to a report in the Los Angeles Times.

In London, Heathrow Airport, which expected to see about a million passengers pass through during the week before Christmas according to BBC, decreased departures to a third of total flights until Wednesday morning. Among them, British Airways cancelled all short-haul departures. 

The flight chaos seems to have had a positive impact on Heathrow hotel rates, according to data from STR Global.

In daily performance metrics, average daily rates on 18-20 December were the year’s highest for the Heathrow Airport submarket in British pounds, according to Konstanze Auernheimer, director of marketing and analysis for STR Global. On Saturday, they rose to £97 (US$149.25), bumped up higher to £109.68 (US$168.76) on Sunday, and hit a year-high Monday at £118.92 (US$183).  Occupancy, however, was actually down in year-on-year comparisons. Heathrow airport revenue per available room for December week-to-date was up 78.6% as of 20 December.

Europe hotel performance

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

Source: STR Global

“Europe was the second region after Asia/Pacific which reported RevPAR growth in December 2009,” said Elizabeth Randall, managing director of STR Global. “Since then, we have seen monthly RevPAR improvements driven by occupancy and ADR growth. Compared to the year-to-November 2008 results, Europe’s year-to-date occupancy is just off 1.4 percentage points and the region is €8 (US$10.72) behind year-to-date 2008. The performance of key cities across Europe can be attributed to the wider economic conditions in the respective countries or supply increases. For instance, Athens, Copenhagen, Dublin, Moscow and Oslo reported year-to-date RevPAR declines, while Amsterdam, Tel Aviv and London grew the strongest this year (in local currency).”

• Read “STR Global: Europe hotels report Nov. increases."

Hotel companies rebrand

At least two European hotel companies rebranded within the past month.

Independent hotel and hospitality group Alternative Hotel Group rebranded itself as De Vere Group in December. This move follows a brand review which recognized the strength of AHG's leading De Vere brands. The principal operating brands will be De Vere Hotels, De Vere Venues and De Vere Village. The brands of Greens, the 15 strong leisure club business, and G&J Greenall, the gin and vodka distiller, will be unaffected.

Richard Balfour Lynn, Chief Executive, said: “We believe that the parent company name should reflect its principal brands and be recognizable as the owner of the U.K.'s leading independent hotel and hospitality businesses. The emphasis of the De Vere name across these successful operating businesses will have significant resonance with our large and growing customer base.”

• Read “Alternative Hotel Group rebrands as De Vere.”

In advance of opening a 583-room London hotel and a property of similar size in Amsterdam during April 2011 (the first hotel outside London), City Inn rebranded as Mint Hotel. The company’s six existing properties—London’s Westminster, Bristol, Birmingham, Manchester, Leeds and Glasgow—are also now Mint Hotels.

CEO David Orr, who along with his father Sandy Orr founded the chain in 1995, said the brand outgrew and out-developed its original name.

• Read “City Inn rebrands as Mint Hotel, plans growth.”

Europe hotel pipeline

The Europe hotel development pipeline comprises 732 hotels totaling 124,348 rooms, according to the November 2010 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 21.3% and 26,490 rooms. Two other segments each made up more than 15% of rooms in the total active pipeline: the unaffiliated segment (19.6% with 24,348 rooms) and the upper upscale segment (15.6% with 19,404 rooms).

* Includes those projects in the In Construction, Final Planning and Planning phases. .

• Read “STR Global: Europe pipeline for Nov.”

New boutique hotel group ramps up in Paris

Hotel entrepreneur Olivier de Geffrier will restore and manage 10 boutique hotels in Paris, the first of which is set to open by the middle of 2011. Geffrier, who founded Parisian hotel reservation website www.Paris-Rez.net and has spent the past decade in hotel management, will manage the hotels on behalf of primarily Chinese investors.

The portfolio’s 500 new hotel beds will help address a shortage in Paris. “For about six months of the year, it is very hard to get a room in Paris,” Geffrier said. “We are targeting a rather haute de gamme client, but a different category to the new 5-stars which ask €600 Euros (US$790) a night—we will be aiming at €200-300 Euros (US$265-390) a night.”

• Read “New boutique hotel group fills Paris bed shortage.”

London performance forecast

London is projected to finish 2010 with an 11.4% RevPAR increase, according to STR Global. The market is forecasted to end 2011 with a 2.2% RevPAR increase.

Whilst there is no doubt 2010 was a year of recovery for London, it was not clear how good the year would be at the beginning of 2010. In July, London hotels achieved the highest RevPAR of the past 11 years. The January 2010 STR Global Market Forecast report showed London would finish the year with 9.4% RevPAR growth. This has now been revised upward to an 11.4% increase in RevPAR for the year. Year-to-date October 2010 results showed London with a 12.4% increase in RevPAR.

• Read “STR Global releases London 2010, 2011 forecast.”

London hotels profitable in November

London hotels recorded profitability growth in November, according to the latest HotStats survey from TRI Hospitality Consulting published on Hotel News Resource.

Gross operating profit per available room increased by 10.7% to £85.38 (US$132.40), taking the year to date average for GOPPAR to £68 (US$105.44), which is 14.7% higher than the same time in 2009. Total revenue per available room grew by 8.4% to £168.20 (US$260.81) from £155.14 (US$240.56) in 2009.

Sheraton drives Starwood’s EAME growth

Starwood Hotels & Resorts Worldwide’s Sheraton hotels is driving growth for the company in the EAME region.

In the region, there are 94 Sheratons open of its 250 properties total. By location, 17 are in Africa and the Indian Ocean vicinity; 16 are in the Middle East; and the other 61 are in Europe. Starwood’s pipeline consists of 50 hotels in the EAME expected to open by 2012, the company said. Areas of focus are Russia, Turkey, South Africa and the Middle East.

Sheraton previously announced it will open approximately 50 new hotels during three years in 15 countries and territories. The three-year, global brand overhaul includes more than US$4 billion in new hotels, renovations and brand initiatives in North America and another US$2 billion in new hotels internationally. Since 2007, Starwood opened 57 new Sheratons, renovated 100 more and installed 100,000 new beds.

• Read “Sheraton drives Starwood’s EAME growth.”

Spain’s Paradores lends expertise in Saudi Arabia

After more than 80 years of successfully transforming Spanish convents, palaces and castles into luxury hotels, the state-owned Paradores chain is now selling the concept overseas with a consultancy and training contract signed with the government of Saudi Arabia.

Under the terms of the agreement signed with the Saudi Commission for Tourism and Antiquities, Paradores staff will help in the initial phases of the project: choosing historic Saudi buildings with hotel potential; advising on restoration; cooperating on a business model for the future chain; and assisting in training managers and senior employees.

• Read “Saudi Arabia taps into Spain’s Paradores concept.”

Ireland reports drop in annual visitors

The anticipated recovery in Irish tourism did not materialize in 2010, according to the Irish Tourist Industry Confederation in its Year-End Review and Outlook for 2011.  

More than 1 million, or 16%, fewer overseas visitors came compared with 2009, with total arrivals at an estimated 5.5 million. That is 2.2 million fewer visitors than the peak year of 2007, a level last seen in 1998. Ireland’s largest source market, Britain, accounted for 1.3 million of those lost visitors. Earnings from overseas visitors contracted by one-third during the past three years, with annual revenue now €1.7 billion (US$2.2 billion) less than in 2007.

The domestic market performed reasonably well, with just a marginal drop in visits, although domestic revenue is estimated to have fallen by 10% to €1.25 billion (US$1.64 billion), the ITIC said.

Steigenberger plots expansion course

Frankfurt-based Steigenberger Hotels AG plans to add 15 hotels per year to its existing portfolio of 80 properties.

The company has two brands: Steigenberger Hotels and Resorts and InterCity Hotels.

The company will invest about €100 million (US$131.6 million) during the next four years as part of the expansion program, said Arco Buijs, CEO of Steigenberger. The expenditures include major renovations at Steigenberger Hotels in Düsseldorf and Stuttgart.

• Read “Steigenberger plots major expansion course.”