Hotel News Now each week features a news roundup from a different region of the world. This week’s compilation covers Europe.
STR Global: Europe results for year-end, December
The European hotel industry recorded positive year-end 2015 results in the three key performance metrics when reported in Euro constant currency, according to data from STR Global, the sister company of HNN. Compared with 2014, Europe reported a 2.3% increase in occupancy to 70.1%, a 4.6% increase in average daily rate to €112.16 ($126.68) and a 7.1% increase in revenue per available room to €78.68 ($88.87).
Paris experienced decreases in occupancy (-4.8% to 76.5%) and RevPAR (-1.7% to €195.58 ($220.91)). ADR in the market increased 3.3% to €255.80 ($288.93), while Paris’ occupancy decreased year-over-year in 10 of 12 months in 2015. During the final month of the year, occupancy fell 20% to 58.9%, the lowest December absolute occupancy in the market since 2001. According to STR Global analysts, performance was boosted some by the United Nations Conference on Climate Change (30 November-11 December); however, security concerns have led to an overall decline in travel to Paris.
STR Global: Europe pipeline for December
There are 1,132 hotels totalling 161,940 rooms under contract in Europe, according to the December 2015 STR Global Pipeline Report.
This represents a 16.2% increase in rooms under contract compared with December 2014 and a 7.8% year-over-year increase in rooms under construction. The under contract data includes projects in the in construction, final planning and planning stages but does not include projects in the unconfirmed stage. The region reported 60,787 rooms in 458 hotels under construction for the month.
Among the countries in the region, the United Kingdom reported the most rooms under construction with 14,121 rooms in 181 hotels. Three other countries reported more than 5,000 rooms under construction: Germany (8,369 rooms in 40 hotels); Turkey (8,128 rooms in 49 hotels); and Russia (7,933 rooms in 39 hotels).
New French REIT debuts with €240m
Aviva Investors Real Estate France SGP and fellow private equity firm Algonquin have announced the founding of a new real estate investment trust—Primotel Europe—which will be fully focused on the European hospitality market.
The €240-million ($271-million) venture will be a regulated investment fund dedicated to the hotel market and directed toward institutional investors, with its portfolio to comprise of prime French and European city hotels from 3 to 5 stars, with a participation in either real estate only or both real estate and operations.
Choice debuts Ascend Collection in UK
Choice Hotels International announced the first two Ascend Hotel Collection properties in the United Kingdom: the 18-room, 5-star The Howard and 42-room, 4-star Channings Hotel, both in the Scottish capital Edinburgh. Both hotels will continue to be owned and managed by The Edinburgh Collection, which has two other properties in the Scottish capital.
Mark Pearce, SVP of Choice Hotels’ international division, told HNN the company plans to expand Ascend, a soft brand, over the next three years to between seven and 10 properties in the U.K. and 80 or so across mainland Europe.
Spanish chains ramp up global expansion
Riding a wave of booming international travel, a rebounding domestic market and healthy financial results, executives at Spain’s three leading hotel chains—Barceló Group; Meliá Hotels International, and NH Hotel Group—have announced major expansion plans over the coming year with Asia as a prime target, according to HNN contributor Benjamin Jones.
Talking about China, Barceló’s CEO for the Europe, Middle East and Africa region, Raúl González, said “one can’t enter such a big market with just a few hotels so we are going for critical mass, planning to eventually have no less than 15 hotels,” while NH’s Hugo Rovira, managing director for Spain, Portugal and Andorra, added “the Chinese hotel sector is mostly luxury or low cost, and we think we can fill that gap in the middle for good quality at a fair price.”
Accor complete Chinese partnership deal
AccorHotels completed its development alliance with China’s Huazhu Hotels Group, first announced on 14 December, which will give the French hotel firm a seat on the Huazhu board and a 10.8% stake in the Chinese company. Accor said it intended to grow its brands in China, Taiwan and Mongolia by between 350 and 400 properties over the next five years.
In other Accor news, the company said it proposes to spin off 85 European hotels, to be placed into a new franchise business that AccorHotels will own a 30% stake in. Exclusive negotiations are taking place with Eurazeo, but AccorHotels will maintain management of the properties, which it said had an asset value of €504 million ($548 million).
Deals and developments
- Jermyn Street Real Estate Fund has acquired the Westin Astir Palace Resort from Greece’s privatization agency for €400 million ($453 million; approximately €1.2 million ($1.3 million)) per key). The resort contains two hotels, the 162-room Westin Athens and 181-key Arion, A Luxury Collection Resort & Spa;
- InterContinental Hotels Group has announced the first of its Kimpton Hotels & Restaurants brands outside of the United States, a 270-room currently without a name but a conversion of its Crowne Plaza Amsterdam City Centre. It will open in 2017;
- Talking of InterContinental Hotels Group, the British-based company debuted its 453-room InterContinental London—The O2 on the Greenwich Peninsula, which is adjacent to the 02 Arena, one of London’s preeminent entertainment venues. The hotel will operate under a franchise agreement with Meridian Hotel Operations Limited and be managed by Arora Group;
- Starwood Hotels & Resorts has announced the signing of the W Madrid, its first in the Spanish capital for that brand. To open in 2018, the 141-room hotel will be owned by Merryland Inversiones S.L.U.;
- Swissôtel Hotels & Resorts will open the 200-room Swissôtel Sofia in the Bulgarian capital in 2018 in a deal with Turkish developer Garanti Koza;
- Choice Hotels International has signed a 10-year franchise deal with Dema Hotels and Oxford Hospitality, which will begin with three hotels to all open in Antwerp, Belgium, within 2016.
Compiled by Terence Baker.