Europe’s hotel construction pipeline sees slight decline year-over-year at the end of Q1 ’22

According to the most recent Hotel Construction Pipeline Trend Report from Lodging Econometrics (LE), Europe ends 2022’s first quarter with 1,781 projects/277,290 rooms. An 8% decrease by projects and an 11% decrease by rooms year-over-year (YOY).

Projects under construction stand at 875 projects/141,304 rooms, at the end of Q1 ‘22, while projects scheduled to start construction in the next 12 months stand at 443 projects/65,611 rooms. Projects in the early planning stage are at 463 projects/70,375 rooms, projects in this stage are up 5% by projects and down 1% by rooms YOY.

Similar to other regions around the world, the past two years have been challenging for Europe’s hospitality industry. And now, with the conflict between Russia and Ukraine, the hotel construction pipeline in Europe is again experiencing timeline delays as developers put projects on hold and cease development activity in these countries. The rate of new hotel openings in Europe has dropped significantly over the last three quarters. Last year, at Q2 ‘21, new hotel openings reached a record-high of 169 hotels/24,472 rooms; as many hotels that were delayed during COVID were pushed through and completed. However, at the end of Q1 ‘22, this number dropped to 60 new hotel openings, accounting for 8,931 rooms. This is still above the region’s lowest new hotel opening point, which occurred during the peak of COVID in Q2 ‘20, in which only 37 hotels/6,871 rooms opened.

Even with the ongoing Russia and Ukraine conflict, there are encouraging signs for the hotel industry in Europe. Several countries and those that are popular tourist destinations have seen a steady increase in business and leisure travel demand in recent months. As we move into the summer season, the rise in travel and hotel demand is expected to continue to trend upward.

During the first quarter of 2022, Europe opened 60 new hotels with 8,931 rooms. At this time, and barring any further conflict escalation, LE analysts expect another 359 new hotel projects to open accounting for 53,930 rooms, for a year-end total of 419 new hotel projects/62,861 rooms to open in 2022. LE analysts forecast 468 new hotel projects, with 65,712 rooms, to open in 2023.

Four franchise companies account for 46% of the pipeline in Europe

Franchise companies with the largest construction pipelines at Q1 close are Accor, with 272 projects/37,320 rooms, and Marriott International, with 205 projects/32,087 rooms. Hilton Worldwide follows with 188 projects/27,790 rooms, then InterContinental Hotels Group (IHG) with 155 projects/21,219 rooms. These four companies account for 46% of the projects and 43% of the rooms in the total pipeline.

The leading brands in the hotel construction pipeline for these four companies are Accor’s Ibis brands with 96 projects/11,615 rooms, Hilton Worldwide’s Hampton by Hilton brand at 74 projects/11,144 rooms, IHG’s Holiday Inn Express with 62 projects/8,906 rooms, and Marriott International’s Moxy brand with 48 projects/8,237 rooms.

London with 85 projects/13,777 rooms leads Europe’s hotel construction pipeline

According to LE analysts, the top countries in Europe’s Construction Pipeline by project count at Q1 ‘22 are the United Kingdom with 328 projects/48,207 rooms, Germany with 266 projects/47,004 rooms, and France with 161 projects/18,981 rooms. Next, with 125 projects/14,880 rooms, is Portugal, followed by Poland with 82 projects/11,693 rooms.

The European cities with the largest number of hotel projects in the construction pipelines, at the close of the quarter, are London with 85 projects/13,777 rooms, Dusseldorf with 47 projects/8,969 rooms, Paris with 41 projects/6,461 rooms, Istanbul with 33 projects/6,795 rooms, and Lisbon with 33 projects/3,773 rooms.