In the 2021 year-end Europe Hotel Construction Pipeline Trend Report by Lodging Econometrics (LE), analysts report Europe’s hotel construction pipeline stands at 1,824 projects and 295,152 rooms at the close of the fourth quarter.
From 2014 through 2020, Europe’s construction pipeline experienced a steady year-over-year (YOY) increase in project totals. Starting in Q2 2021 and continuing throughout the year, this trend has been reversing with the region’s construction pipeline totals falling slightly below 2019’s year-end totals. This drop in project totals is due to development and opening delays, project cancellations, as well as other project obstacles related to the COVID-19 pandemic, such as supply chain and labor shortages, along with the increased cost of labor and materials.
Nevertheless, with some of the world’s most popular tourist destinations, Europe has seen a swell in domestic and inter-regional travel over the past year. International arrivals to Europe increased nearly 75% YOY. Hotel performance is a significant driver of hotel development and as a result, there is optimism that delayed projects may soon come back online.
At Q4 ‘21, projects under construction stand at 860 projects/142,898 rooms, down 11% by projects and 9% by rooms YOY. Projects scheduled to start construction in the next 12 months stand at 470 projects/72,194 rooms, down 1% by projects and 3% by rooms YOY. Projects and rooms counts in the early planning stage are both up 7% YOY, ending Q4 with a record high of 494 projects accounting for 80,060 rooms, also a record high room count for this stage in the region.
Announced renovation and conversion project and room counts are up at the end of Q4, with a record high of 433 projects/62,368 rooms, up 19% by projects and up 21% by rooms YOY. Conversions at Q4 ‘21 reached a high of 293 projects and 40,088 rooms and renovations closed the quarter standing at 140 projects/22,280 rooms.
The United Kingdom leads the construction pipeline with project and room counts in Q4 ’21, at 313 projects/48,770 rooms. The UK is followed closely by Germany with 277 projects/48,827 rooms, then France with 159 projects/19,003 rooms. Next is Portugal with 119 projects/14,362 rooms, and Poland with 85 projects/12,285 rooms.
The cities in Europe with the largest hotel construction pipelines include London, UK, with 83 projects/14,768 rooms, Dusseldorf, Germany, with 53 projects/9,999 rooms, and Paris, France, at 37 projects/6,036 rooms. Next is Lisbon, Portugal, with 34 projects/3,822 rooms, followed by Istanbul, Turkey, with 31 projects/5,986 rooms.
With record-high counts at the end of the fourth quarter, Accor leads franchise companies in Europe with the largest pipeline by projects, at 300 projects/42,846 rooms. Accor is followed by Hilton Worldwide with record-high projects counts for the company of 216 projects accounting for 33,130 rooms. Marriott International is next, with 211 projects/33,353 rooms. Marriott is followed by InterContinental Hotels Group (IHG) with 158 projects/23,486 rooms. These four companies account for 49% of the projects in the total pipeline.
Top brands in Europe at Q4 ‘21 are led by Accor’s Ibis brands with 103 projects/12,505 rooms, then Mercure, at an all-time high project and room count, with 31 projects/4,169 rooms. Hilton Worldwide’s top brands at Q4 are its Hampton by Hilton brands with 84 projects/12,911 rooms and its Hilton Garden Inn brand with 47 projects/8,005 rooms. Marriott International’s top brands at Q4 are Moxy with 51 projects/8,684 rooms and Courtyard by Marriott with 23 projects/3,959 rooms. IHG’s top brands at Q4 are Holiday Inn Express with 64 projects/9,403 rooms and its Holiday Inn brand with 22 projects/4,403 rooms.
During the fourth quarter of 2021, Europe opened 87 hotels/12,204 rooms, for a total of 427 hotels and a record high of 62,272 rooms in 2021. LE is forecasting another 474 new hotels, accounting for 70,242 rooms, to open in 2022 and another 504 new hotels with 75,015 rooms to open in 2023.