Hotel News Now each week features a news roundup from a different region of the world. This week’s compilation covers Europe.
STR: Europe hotel pipeline for June 2017
The June 2017 Pipeline Report from STR, the parent company of Hotel News Now, showed 169,046 rooms in 1,100 hotel projects under contract in Europe. The total represents a 17.5% increase in rooms under contract compared with June 2016. Under contract data includes projects in the in construction, final planning and planning stages, but does not include projects in the unconfirmed stage.
Europe reported 77,263 rooms in 495 projects in construction for June. Based on number of rooms, that is a 24% increase in year-over-year comparisons. Among chain scale segments, the upper midscale segment accounted for the largest portion of rooms under contract (27.5% with 46,516 rooms). The upscale segment represented the largest portion of rooms in construction (25.3% with 19,570 rooms).
EU, courts reshaping rate-parity landscape
The battle to ban rate parity across online travel agencies and the hotel industry is heating up across Europe, writes Hotel News Now’s Terence Baker.
“The main debate is if settlements are reached only at the national level, are they consistent with one another? The French, Swedish and Italian national competition authorities’ positions were consistent with one another, but in Germany, where the company being investigated was HRS, the (December 2013) decision was not. If the (German) Bundeskartellamt had investigated an online travel agency with significant market shares in other European countries, then it might have adopted the same framework,” said Dan Roskis, a Paris-based partner at law firm Eversheds Sutherland.
Starwood Capital exits four Spain resorts
Starwood Capital Group, via its Starwood Global Opportunity Fund X, has exited from its 80% hold of four Spanish hotels, selling the 799-room Sol Principe; 700-room Sol Palmanova; 343-room Sol Lanzarote, and 254-room Sol House Ibiza to London & Regional for €250 million ($291 million).
A Starwood Capital news release announcing the February 2015 buy of the resorts suggested a purchase price of €176 million ($205 million) but for seven assets, not four. Melià Hotels International, which owned the remaining percentage (20%), will continue to do so and retain management.
London hotel market demonstrates resilience to terror
The spate of terrorism incidents that have hit Europe over the last couple of years have all caused shock and outrage, Baker writes. However, in terms of hotel performance, sources said that resulted in noticeably different outcomes, in that it’s very unlikely that there will be no impact, but the impact will be less substantial than that seen in other markets.
“London has a healthier percentage of corporate guests than those markets do,” said Asli Kutlucan, director of development and acquisition at Cycas Hospitality. “Paris’ bread and butter is leisure, and leisure is the first to cancel. This affects cities in two ways, as corporate customers cancel less and they pay more. Paris declined 30% (following its attacks) in six months, and its dip in RevPAR was double-negative. In London, occupancy dips a little, but (average daily rate) still holds up.”
Regensburg: The little city that took on the OTAs
A small city in Germany, Regensburg, is embarking on the second phase of its own hotel-booking platform that went live in 2014, according to Kathrin Fuchshuber, GM of the city’s 59-room hotel Münchner Hof and brainchild of the booking platform, which is meant to attract conference groups. Some hotels are already on board, such as Atrium im Park, Baker writes.
“We’re first a business hotel, although with a leisure component for both groups and individuals. The Regensburg portal for sure is not the winner in terms of bringing in revenue—very little that is for sure. But on the other hand, our conferences are getting very strong, and as customers gain knowledge of us and understand what we have collectively, the city can start to organize conferences of 500 or 600 directly, and that can be a lot of income without commission,” said Ralf Leidner, GM of 96-room Atrium im Park.
Extended-stay hotels poised for a leap in Europe
Speaking at the Serviced Apartment Summit Europe, CEOs from five extended-stay/aparthotels companies said technology, investor confidence, social media and increased supply and education will be catalysts for change for the sector in Europe, with right now representing the opportunity to make solid leaps, Baker writes.
“How travelers/consumers think about travel has dramatically changed, which is great for us,” said Sean Worker, CEO of BridgeStreet Global Hospitality. “The change has been quantum, and we’ve seen travel managers looking for alternative supply.”
Deals and developments
- Norway’s Wenaasgruppen bought the AC Hotel Bella Sky Copenhagen in the Danish capital from private equity firm Solstra Investments for an undisclosed sum. BC Hospitality Group operates the property under a franchise agreement with Marriott International.
- Sweden’s Scandic Hotels has signed an agreement with owner Exilion to open a 483-room property in the Central Railway Station in Helsinki, Finland, which dates to 1919. The asset is due to open in 2020.
- Hotel developer GBI AG and Deutsche Hospitality have agreed terms on four lease-agreement assets with a total of about 800 rooms to all open by the end of 2023.
- Gilmour S.a.r.l has sold the freehold interest of the 189-room DoubleTree by Hilton London - Ealing to the joint venture company HPL Ealing Private. The hotel is set to open in 2018 with a franchise agreement with Hilton Worldwide.
- Focus Hotels Management and developers Percor Capital are to open a 102-room Hilton Indigo Dundee and an 85-room Staybridge Suites Dundee in Dundee, Scotland. InterContinental Hotels Group will manage both properties and will open next year.
- Hillgate Investments sold the 330-room Hyatt Place Amsterdam Airport for €53.8 million ($62.6 million) to Avignon Capital. The hotel was developed and opened by Hillgate in 2014.
- Package-tourism company TUI opened the 161-room TUI Blue Jadran in Croatia, the first of its brand in the country.
- On 30 June and 1 July, Nobu Hotels opened its first two European properties, the 152-room Nobu Hotel Ibiza Bay, on the Spanish island of Ibiza, and 148-room Nobu Hotel Shoreditch London, in London. Another Spanish property, in Marbella, is due to open in 2018.
- Marriott International lifestyle brand AC Hotels by Marriott debuted in Germany with the 58-room AC Hotel Mainz.
- AccorHotels announced the August 2017 opening of its 86-room hotel MGallery by Sofitel in London’s Leicester Square.
Compiled by Terence Baker.