Hotel News Now each week features a news roundup from a different region of the world. Today’s compilation covers Europe.
February 2014 Europe pipeline
The Europe hotel development pipeline comprises 864 hotels totalling 140,114 rooms, according to the February 2014 STR Global Construction Pipeline Report. STR Global is a sister company to Hotel News Now.
Among the region’s key markets, Manchester, England, reported the largest expected supply growth (+26.9%) if all 3,751 rooms in its total active pipeline open. Four other markets reported significant expected supply growth: Moscow (+23.7% with 9,286 rooms); Baku, Azerbaijan (+19% with 710 rooms); Istanbul (+15.1% with 6,089 rooms); and London (+14.9% with 17,594 rooms).
London preliminary data
According to STR Global’s preliminary daily data for February 2014, London showed positive growth in the following key performance indicators:
- increases in supply (+1.2%) and demand (+2.9%);
- a 1.6% increase in occupancy to 76.8%;
- a 4.9% increase in average daily rate to £128.12 ($212.69);
- a 6.6% rise in revenue per available room to £98.34 ($163.26); and
- a 4.2% increase in RevPAR is expected in 2014.
“London continued to grow RevPAR in February for the sixth month in a row, mainly driven by an increase in ADR,” said Elizabeth Winkle, managing director of STR Global. “The fast-growing U.K. economy, as well as the continuing recovery of the eurozone, suggests a positive outlook in terms of hotel performance for the British capital in 2014.”
Starwood Capital acquires De Vere Venues
Starwood Capital Group acquired U.K. hotel and conference center operator De Vere Venues from the De Vere Group for approximately £232 million ($385 million). De Vere’s portfolio, all in the U.K., consists of 23 owned and leased hotels representing 2,433 keys and 414,000 square feet of meeting space. The portfolio also includes nine management and franchise contracts.
Ireland’s Dalata celebrates IPO
Irish hotel operator Dalata raised €265 million ($369 million) from listing its shares in Dublin and London. It was the latest real estate-related initial public offering in Ireland as the property market stabilizes.
Irish commercial property prices have steadied after falls of around 65% when a credit-fuelled real estate bubble burst, leading to a surge in demand from international investors for hotels, office blocks and retail units. Dalata said the proceeds would be used to acquire a portfolio of some 16 to 25 hotels throughout Ireland and to pay down debt.
Company numbers
Several U.K. and European hotel companies announced annual results within the last month:
- PPHE Hotel Group, a hotel owner-operator in Europe, reported total group revenue increased by 1.2% to €245 million ($341.2 million) through 2013. The group’s RevPAR maintained at €101.40 ($141.23), reflecting occupancy-led focus. Occupancy increased by 330 basis points to 80.7%.
- Accor’s 2013 results show the French company back in the black, where it intends to stay with plans to continue repositioning its Ibis brand and saving €100 million ($139 million). Its results include revenue up 2.7% to €5.5 billion ($7.71 billion), earnings before interest and taxes to €536 million ($746 million) and operating profit before tax up 5.9% to €446 million ($620 million).
- Whitbread PLC hotel brand Premier Inn, whose properties are all in the U.K., saw RevPAR increase in London by 7% year on year and by 9.6% in the U.K regions. The chain continued to win market share, growing total sales for the 50 weeks by 13.3%, total RevPAR by 5.1% and total roomnights sold by 9.7% to 14.3 million.
St. James buys Forestdale
St. James Hotels Group acquired out of administration 14 3-star hotels in the U.K. previously owned by Forestdale Hotels. Terms of the acquisition were not disclosed. The assets had suffered from under-investment, and St. James intends to inject capital.
Viveris REIM in 26-property buy
Marseilles, France-based asset management company Viveris REIM acquired a portfolio of 26 budget and economy hotels in France, most of which were under the Campanile, Kyriad and Première Classe brands.
Deals and developments
- Millennium & Copthorne agreed a deal to purchase its first Italian hotel with a €65.5-million ($91.1-million) buy of the 87-key Boscolo Palace Roma.
- Blackstone sold the Waldorf Astoria Trianon Palace hotel in Versailles to French investor Financière Immobilière Bordelaise for a reputed price of between €130 ($181 million) and €150 million ($209 million).
- InterContinental Hotels Group will open in 2017 the 192-room Holiday Inn Express Moscow-Sheremetyevo Airport, which will operate under a management agreement with Palmira. IHG also announced plans to open the 120-room Holiday Inn Express Siegen by the end of 2015 in a franchise agreement with Tristar Hotel & Management GmbH; the 213-room Holiday Inn Düsseldorf-Toulouser Allee during 2016 in a franchise agreement with Arcadia Hotelbetriebs GmbH; and in 20016, the 200-rooom InterContinental Tbilisi, Georgia, in a management agreement with Adjara Group.
- Starwood Hotels & Resorts has signed an agreement with Cevahir Yapi Sanayi Turizm ve Ticaret A.S. to open the 160-room Sheraton Istanbul Atasehir in 2015. The announcement is part of Starwood Hotels’ plans to open more than 60 new hotels and resorts across Europe by 2020.
- German hotel group Arcadia sold the 84-key Hotel Schloss Goldschmieding in Castrop-Rauxel, Germany, to Austrian company Vienna International Hotels & Resorts. Arcadia will continue to manage the property.
Compiled by Terence Baker.