HotelNewsNow.com each week features a news roundup from a different region of the world. Today’s compilation covers Europe.
Mixed monthly performance in Europe
The Europe hotel industry posted mixed results in year-over-year metrics when reported in U.S. dollars, euros and British pounds for October 2012, according to data compiled by STR Global, sister company of HotelNewsNow.com.
“The positive news across the European hotel market is the solid performance of average daily rates (in euros) with a 6.1% and 5.3% growth for October and the year-to-date period, respectively,” said Elizabeth Randall Winkle, managing director of STR Global. “ADR benefited from strong European demand, in terms of number of occupied rooms, which stands at historic high levels and continued to increase 1.4% for October and 0.9% for year to October.”
Spanish hoteliers predict bleak winter
Spanish hoteliers are predicting a bleak winter season caused by the country’s economic ills and government austerity measures that are directly affecting the industry, according to a survey carried out by the Confederation of Spanish Hotels and Tourist Accommodations, commonly known as CEHAT.
“The winter season will not be good for us,” CEHAT President Juan Molas said during a news conference to present the results of the poll of the confederation’s 64 hotel member associations around the country representing 14,000 properties. Spain’s domestic market outlook is, frankly, alarming,” he said.
Molas said it was the first time in four years Spanish hotel owners and operators expected a negative winter season. Their expectations concerning overnight stays, profitability, length of stay and average room rates were down 31 % compared with the same period a year ago.
Title insurance emerges in Europe
While purchasing title insurance is a customary part of nearly every real estate transaction in the United States, its availability—until recently—has been rather limited elsewhere in the world. Today, the availability of title insurance, particularly throughout Europe, is helping global investors feel more confident about closing hotel transactions in foreign lands.
“This is an evolving situation. Title insurance is becoming more and more common,” said real estate lawyer David Dixon, partner at Norton Rose Piotr Strawa and Partners LP in Warsaw, Poland. “It helps you get deals done. And at the end of the day, it’s all about buying the hotel.”
STR Global: Europe pipeline for October
The Europe hotel development pipeline comprises 868 hotels totaling 140,952 rooms, according to the October 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.
Year to date in Europe, 283 hotels have opened with 35,324 rooms. In the remainder of 2012, 69 more hotels are expected to open in the region with 9,904 rooms. The most rooms are expected to open in the unaffiliated segment (18 hotels with 2,448 rooms), followed by the upper-upscale segment (nine hotels with 1,927 rooms) and the luxury segment (seven hotels with 1,444 rooms).
Starwood’s Luxury Collection gets a facelift
The Luxury Collection Hotels & Resorts, part of Starwood Hotels & Resorts Worldwide, announced that the company and its owners are investing $200 million to renovate and restore some of its most celebrated hotels in Europe. The brand is already off to a strong start with the reopening of two iconic hotels in Spain this year: Hotel Alfonso XIII in Seville and Hotel Maria Cristina in San Sebastian. This will be followed by the debut of the restored Gritti Palace in Venice and Prince de Galles Hotel in Paris in 2013.
Host acquires 1,733-room Marriott portfolio
Host Hotels & Resorts acquired shares in the owning company of five Marriott-operated 4- and 5-star hotels from Goldman Sachs’ Whitehall 2005 Global and International Funds for a price of €440 million ($570 million).
Totaling 1,733 rooms, the portfolio includes four hotels in Paris, including Marriott's largest hotel in Europe, and one 4-star hotel in Amsterdam. The properties are the 757-room Paris Marriott Rive Gauche Hotel & Conference Center, the 402-room Renaissance Amsterdam Hotel, the 327-room Renaissance Paris La Defense Hotel, the 97-room Renaissance Paris Vendome Hotel and the 150-room Courtyard Paris La Defense West–Colombes. All five hotels will continue to be operated by Marriott International.
Consolidation in the UK mid-market
Investors and consultants alike believe the United Kingdom´s mid-market is ideally positioned for consolidation despite financing hurdles that are slowing down movement to that effect.
“There are very many hotels in that middle market that don’t have a strong brand, and that’s where I think they are particularly ripe for being pulled together and given a stronger identity,” said Russell Kett, managing director of global hotel valuation and consulting business HVS.
Some potential candidates include: Principal Hayley Group, De Vere Hotels, QHotels and Jurys Inn, sources said.
KKR bid for NH could transform Spanish chain
U.S. private equity firm KKR’s proposal to take an almost 16% stake in the troubled Spanish chain NH Hoteles could transform the company as it struggles with almost €1 billion ($1.3 billion) of debt, overexposure in its lackadaisical domestic market for its mostly urban properties and a hide-bound management style, industry experts say.
“NH has long been mentioned as a takeover target since Mariano Pérez Claver took over as president and CEO in February 2011 in representation of Spanish savings bank BFA-Bankia,” said Ivar Yuste, partner at Barcelona-based consulting firm PHG Hotels & Resorts.
NH, Europe’s third-largest business hotel operator and with almost 400 properties in Europe, Africa and the Americas, announced the preliminary KKR offer in a statement to Spain’s stock market regulator, saying the private equity firm proposed buying bonds that could be converted into shares and that the board was studying the offer.
Deals and developments …
- The 90-room Hotel Herodion in Athens, Greece, has joined Warwick International Hotels’ Collection.
- The $337-million, 5-star Alpina Gstaad opened its doors in Gstaad, Switzerland, last week.
- Starwood Hotels & Resorts Worldwide signed the Aloft Munich and Aloft Stuttgart. Owned and developed by the Schörghuber Corporate Group, Aloft Munich and Aloft Stuttgart will mark the entrance of Starwood’s Aloft Hotels brand in Germany when they open in 2015.
- Hilton Worldwide signed of a franchise agreement with Layetana to open its second DoubleTree by Hilton hotel in Spain. The deal will see the conversion of the existing La Mola Hotel & Conference Center to the DoubleTree by Hilton brand, with the renovated property set to open at the beginning of 2013.
- DoubleTree by Hilton has announced the opening of its first hotel in Croatia, located in a prime position in the business district of the historic capital city, Zagreb.
- Hilton’s Hampton brand welcomed its latest property, the 188-room Hampton by Hilton London Luton Airport.
- Hilton announced plans to introduce two new brands to the French market of Val d’Europe with the dual-branded Hilton Garden Inn and Hampton by Hilton Val d'Europe on the doorstep of Disneyland Paris. The opening of what will become the company's first dual-branded property in France, and the first dual-branded Hilton Garden Inn and Hampton by Hilton for Europe, is scheduled for 2015.
- Hilton announced the opening of Hilton Garden Inn Davos, the brand's first property in Switzerland.
- Hilton signed a management agreement with S+B Gruppe AG to open a new Hampton by Hilton hotel in Warsaw city center, which will be the largest of its kind in Europe.
- Premier Inn celebrated a double milestone last week with the announcement of its 50,000th room at the opening of the company’s largest ever Premier Inn at London Gatwick Airport (630 rooms).
- The Blackstone Group acquired the 501-room Burlington Hotel in Dublin for €67 million ($87 million) from Property developer Bernard McNamara, according to the BBC.
- Meliá Hotels International added a new hotel under the urban Innside Hotels brand in Germany. The Innside Essen, in the historic industrial city of Essen, just 26 kilometers (16 miles) from Dusseldorf, will further reinforce the Spanish company’s strong commitment to growth in Germany.
- A 1930s Police Station in the heart of Greenwich has been converted and re-opened as the Mercure London Greenwich.
- The Radisson Blu Hotel, Glasgow in Scotland has been purchased out of administration by Azure Properties for a reported £27.5 million ($44.1 million), according to HVS. The 247-room hotel had been in administration since November 2011.
- The Rezidor Hotel Group opened the 127-room Park Inn by Radisson Lille Grand Stade in France.
- Rezidor opened its latest flagship in Russia, the 508-room Radisson Blu Resort & Congress Centre, Sochi. The company also announced the Radisson Blu Beach Resort & Spa, Sochi, which will feature 508 rooms when it opens in Q4 2013.
Compiled by Patrick Mayock.