26 Feb 2020
February 26, 2020

Q419 Europe New Business Opps Newsletter

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— Europe Edition —

LE’s New Business Opportunities

Your quarterly pulse on hotel development and news powered by Lodging Econometrics intelligence


Europe’s hotel construction pipeline continues an upward trend despite some economic challenges

According to the recent Europe hotel construction pipeline trend report from Lodging Econometrics (LE), Europe’s total construction pipeline rose to 1,871 projects/297,490 rooms in the fourth quarter of 2019, a 19% increase by projects and 22% by rooms, year-over-year (YOY).

There are 879 projects/140,620 rooms currently under construction, 531 projects/81,235 rooms scheduled to start construction in the next 12 months, and 461 projects/75,635 rooms in early planning. All stages of the pipeline are at record highs and have counts more than double their cyclical lows set earlier in the decade.

However, Europe closed 2019 with a fragile and waning economy with growth in the Eurozone expanding by a mere 0.1% in the fourth quarter. This is partly due to last year’s lengthy negotiations that resulted in the U.K. leaving the European Union at the end of January 2020, and the uncertainty of the U.S./China trade war which had a significant impact.

Looking forward, the first quarter of 2020 could be rather sluggish too, due in part to the heavily export-dependent German economy, which is being negatively affected by the slowing of the Chinese economy as a result of the coronavirus, France’s weakening economic performance and widespread social turmoil caused by unpopular economic reforms, and the U.K.’s need to reestablish an economic relationship with the European Union by year’s end.

Nevertheless, Europe remains the most popular destination in the world for tourism, the major franchise companies continue to focus development efforts in many areas of the region, and hotel operating performance remains positive, all of which continues to be a significant driver of hotel development in the region. In 2019, 435 new hotels with 58,202 rooms opened throughout Europe, the highest number of new hotel openings ever recorded. As a result of the robust construction pipeline, the LE forecast for new hotel openings will continue to be strong with 457 new hotels/63,402 rooms anticipated to open in 2020 and rising to 503 new hotels/72,078 rooms in 2021.


Four companies are responsible for 45% of Europe’s pipeline, plus leading brands

Franchise companies with the largest construction pipelines are Marriott International with 244 projects/40,679 rooms, and Accor with 241 projects/32,920 rooms. Next is Hilton Worldwide with 191 projects/29,944 rooms, and InterContinental Hotels Group with 156 projects/25,249 rooms. These four companies are responsible for 45% of the projects in the total pipeline. Marriott International, Hilton Worldwide and InterContinental Hotels Group set new record project counts in their European pipelines.

The leading brands for each of these top companies are Marriott International’s Moxy, at an all-time high, with 78 projects/14,013 rooms, Courtyard by Marriott with 31 projects/5,371 rooms, and the Autograph Collection, also at record counts, standing at 24 projects/3,041 rooms. AccorHotels’ top brands are the Ibis brands with 114 projects/14,204 rooms, Novotel with a record 28 projects having 4,360 rooms, and Mercure Hotel with 24 projects/3,021 rooms. Hilton Worldwide has Hampton by Hilton, at an all-time high, with 79 projects/12,486 rooms, Hilton Garden Inn 42 projects/7,092 rooms, and DoubleTree by Hilton with a record 26 projects having 3,214 rooms. IHG’s leading brands include Holiday Inn Express with 72 projects/11,161 rooms, Holiday Inn 32 projects/7,346 rooms, and Hotel Indigo 14 projects/1,457 rooms.


With 346 projects/49,651 rooms, the United Kingdom leads Europe’s pipeline


Europe’s leading countries in the construction pipeline are the United Kingdom with 346 projects/49,651 rooms, and Germany standing at 339 projects/61,836 rooms. France follows with 171 projects/21,173 rooms, and then Portugal and Poland with 118 projects/12,616 rooms and 90 projects/14,028 rooms, respectively. With the exception of France and Poland, these markets all have construction pipelines at record highs.

The cities with the largest pipelines are London with 88 projects/15,575 rooms, Dusseldorf at an all-time high of 60 projects/11,443 rooms, Paris with 44 projects/6,896 rooms, Hamburg standing at 34 projects/7,302 rooms, and Lisbon with 34 projects/3,114 rooms. Moscow follows with 31 projects/6,536 rooms, Berlin with 27 projects/6,202 rooms, and then Frankfurt with 27 projects/5,642 rooms.


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