Anti-Tourism Efforts in Amsterdam Lead to Increased ADR, Investments

by | Nov 8, 2018 | All, News

The city of Amsterdam under anti-tourism policies

Amsterdam put an 18-month hold on hotel development, which has polarized hoteliers, but one thing hospitality investors agree on is that the resultant scareness in the market has driven prices higher.

Last year, city officials in Amsterdam moved to reduce the incredibly high level of international visitors that flock to the city each year, doing so by introducing a set of measures tough on hospitality, the most prominent of which was halting hotel development in the city center, one of the most popular areas for tourists in the city.

It’s not really under dispute whether the volume of tourists in Amsterdam is extreme. Take the 2017 numbers. That year, 17 million tourists visited the city, which represents a massive increase from the 12 million tourists that visited back in 2011. As a result, the Mastercard Global Destination Cities Index for 2017 ended up ranking Amsterdam as the 13th most-visited city in the world, which also made it the fifth most-visited city in Europe.

In response, Amsterdam has responded with its Overnight Policy. Passed in January of 2017, this law now prevents all new hotel development in Zone 1, the World Heritage canal belt, while only allowing a brief and insignificant smattering of new hotel development project opportunity for Zone 2, which encompasses the rest of the city.

It’s a pretty significant and wide-spanning ban, one that applies equally to new build hotels as well as to conversions and room inventory expansions. It also applies to less prominent hospitality facilities such as extended stay hotels and even to hostels.

Since the policy went into effect, the city has granted no additional building permits for inner-city hotels, according to Peter Schickling , GM of the Amsterdam Marriott Hotel.

“There are still a handful of hotels coming up, about 5,000 beds in the next three years, but mostly outside Amsterdam,” he said. “Inside Amsterdam, within the ring road, for sure there are some renovations going on, but nothing new is coming to the market. You cannot build in the inner circle.

“The idea is to restrict tourism a little, but I think the problem of uncontrolled tourism is not coming from hotels, but, like in the whole world, it’s Airbnb.”

Schickling said he doesn’t blame the city for taking action with the hotel moratorium, but occupancies and average daily rates are high, which has made many tourists turn to Airbnb.

“I can live with this ban. There are new hotels coming. For example, on the other side of the harbor, there is a Maritim Hotel, from Germany’s largest owner-managed hotel group, and at the RAI Amsterdam exhibition center, there is a NH Group Hotel property, a 650-room Nhow, underway, so there is still stuff going on,” he said. “But I think downtown, if there is not enough space, it is not a problem for me.”

Schickling said hotel demand in Amsterdam is top-heavy.

“There is not enough supply, so there is definitely space for more hotels, especially during peak times,” he said. “During my four years here, the demand is growing nonstop.”

According to Schickling, Amsterdam hotels are recording occupancy between 85% and 90% with just a couple of winter troughs as Amsterdam’s mix of canals, culture and partying grows increasingly popular.

 

Let’s take a look at a few other projects currently underway in Amsterdam:

Maritim Hotel Amsterdam

Hard Rock Hotel Amsterdam American

Niu Fender

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