Hotel News Now each week features a news roundup from a different region of the world. This week’s compilation covers Europe.
Germany’s Deutsche Hospitality sold for €700 million
Deutsche Hospitality, the German hotel firm with brands such as Steigenberger Hotels & Resorts, Intercity Hotel and Maxx by Steigenberger, is under agreement to be purchased for €700 million ($771.8 million) by Chinese firm Huazhu Group. The deal that was signed on 4 November is due to close in early 2020, reports Hotel News Now’s Bryan Wroten.
Deutsche’s CEO Thomas Willms said the deal would allow it to fulfil its ambitious target of reaching 250 hotels by 2024, its current roster being 118 hotels in operation and 36 under development. Much larger Huazhu has approximately 5,000 hotels in operation.
STR: Europe hotel performance for Q3 2019
Europe’s hotel industry reported positive results across the three key performance metrics during the third quarter of 2019, according to data from STR, parent company of HNN. In euro constant currency, the period compared with the same period in 2018 saw occupancy increased 0.6% to 79.1%, average daily rate increase 1.1% to €121.36 ($133.92) and revenue per available room increase 1.7% to €95.95 ($105.88).
Performance in Lisbon, Portugal, for Q3 is notable in that it is the first quarter since Q1 2014 that it has experienced negative ADR, -1.1% to €128.45 ($141.74). Declines were also seen in occupancy (-1.9%) and RevPAR (-3%). According to STR’s AM:PM database, the city’s pipeline through 2022 represents 15% of existing supply.
Accor enjoys Q3 revenue uptick but narrows guidance
Accor said its Q3 results showed an increase in revenue by 10.9% in reported terms and 4.1% in like-for-like terms, but that is not enough to not have the French hotel firm narrow its earnings before interest, tax, depreciation and amortization from between €820 million ($915 million) and €850 million ($948 million) to €840 million ($937 million) at the high end of a new range, according to HNN’s Terence Baker.
Blame has been placed on increasing geopolitical and economic turmoil in China and Hong Kong, with CFO and deputy CEO Jean-Jacques Morin stating RevPAR in Hong Kong dropped 32% year over year. Its home market saw RevPAR gains, as did its systems network, with 60 hotels opening in the quarter with approximately 8,500 rooms
Russian flight embargo puts pressure on Georgia hotels
The Russian flight embargo, enacted in mid-July, has already resulted in an estimated $60-million loss to the tourism industry in the former Soviet nation of Georgia, and things do not look as though they will improve in the short term, according to freelancer Vladislav Vorotnikov. Georgia’s government has agreed to help hoteliers, but only for properties that have between four and 20 rooms and limited to €80,000 ($88,120) or €100,000 ($110,151) in the form of a reimbursement of interest rates on loans.
Opinion is divided as to the repercussions of the development. Nino Nadibaidze, marketing manager at the 121-room hotel Ambassadori Tbilisi, said the embargo is a huge shock to Georgian hoteliers, who have come to rely on an increasing stream of Russian tourists, but Shalva Alaverdashvili, director of the Georgian Hoteliers & Restaurateurs Association and GM of five properties in construction under the Rcheuli flag, said the impact “is not going to be devastating, since Georgian hotels are not fully dependent on the Russian tourists.”
IHG points to systems growth as global RevPAR falters
InterContinental Hotels Group is on course to growing its network size to above 865,000 rooms by the end of 2019, even though in its Q3 numbers, RevPAR for the British company was down 0.8% compared with Q3 2018, according to HNN’s Baker. Blame here for that drop also has been laid at the door of China and Hong Kong, where it saw a 36% decline in year-over-year RevPAR.
More than 4,000 of its rooms, or approximately 25%, opened in the quarter were in Greater China, said CFO Paul Edgecliffe-Johnson. Its RevPAR numbers in the Europe, Middle East, Asia and Africa region showed slight improvement (+0.3%), with both the United Kingdom and mainland Europe growing RevPAR by 1% year over year.
Deals and developments
- It has been a busy beginning to November for German real estate firm Commerz Real, which has bought the 533-room Maritim Hotel Düsseldorf Airport City for €162 million ($178 million) in a sale-and-leaseback deal with Maritim. Commerz also acquired the 216-room Intercity Hotel due to open in the first half of 2021 for €33.4 million ($36.8 million) from developer GBI.
- Marriott International opened the 169-room St. Regis Venice on 16 October following a two-year renovation of the former Grand Hotel Britannia. The property, the third St. Regis in Italy, consists of five Venetian palaces, with the oldest dating to the 17th Century.
- Riko van Santen, formerly VP of digital strategy and distribution, a role he has held since 2012, has been appointed CIO at Kempinski Hotels. He is also being promoted to the Swiss hotel firm’s management board.
- Swedish hotel operator Pandox AB has bought two assets for a collective €83 million ($91.6 million), the 216-room Novotel Den Haag World Forum in the Dutch capital of The Hague, and the 205-room Novotel Hannover, Germany. Grape Hospitality, a vehicle of Accor and Eurazeo, will continue to operate both, with the deals expected to close during the fourth quarter of 2019.
Compiled by Terence Baker.