Covid19 hotel development analysis: Deutsche Hospitality [Infographic]

by | 25 Jun 2020 | Chains

We dip into the TOPHOTELPROJECTS construction database for an exclusive report looking at how Covid19 is affecting Deutsche Hospitality’s development pipeline.

When reports of a novel coronavirus first surfaced in late 2019, few could have imagined the level of turmoil it would ultimately bring to the global hospitality industry. Lockdowns, travel bans and social-distancing measures were swiftly introduced in country after country, extracting a heavy toll on businesses generally and hotels in particular.

Deutsche Hospitality, formerly known as Steigenberger Hotels Group, has certainly had to cope with plenty of change over recent months. On 2 January 2020, the company was bought by Chinese hotel giant Huazhu Group, which reported that its new acquisition had 23,353 rooms across 119 hotels as of 31 December 2019.

Founded in 1930, the Frankfurt-headquartered business now encompasses the Steigenberger Hotels & Resorts, Maxx by Steigenberger, Jaz in the City, IntercityHotel and Zleep Hotels brands, and has a presence in Europe, Africa, the Middle East and Asia, including many countries where Covid19 infection rates have been worryingly high.

In this article, we examine figures from market research company TOPHOTELPROJECTS to find out how Deutsche Hospitality’s hotel development pipeline is shaping up in the face of coronavirus.

Deutsche Hospitality developments progress despite Covid19

By accessing the database, we can see that Deutsche Hospitality had 35 projects in progress as of 25 May 2020, with one more development on hold and two more schemes cancelled.

Of these live projects, half (17) relate to the company’s IntercityHotel brand. This puts it well ahead of Steigenberger Hotels & Resorts (nine), Zleep Hotels (five), Jaz in the City (three) and Maxx by Steigenberger (one) in the development stakes:

Admittedly, the Covid19 pandemic is far from over, and it’s perfectly conceivable that Deutsche Hospitality will be forced to pull more projects in future, especially in destinations that have been hit hardest by the global health emergency. But as it stands, the hotel industry can perhaps take heart from the fact that more than nine out of ten Deutsche Hospitality projects are still progressing despite all of the current uncertainties in the market.

How Deutsche Hospitality has been affected by coronavirus

Just a matter of weeks after Huazhu’s blockbuster deal for Deutsche Hospitality, the NASDAQ-listed hotel giant was having to face up to the fact that its new acquisition would be unable to trade as planned. On 26 March 2020, the Chinese company told investors that Deutsche Hospitality had been affected by the spread of Covid19 in Europe, and confirmed that local governments had ordered the closure of a number of its hotels.

However, the business also noted that the German government had announced various relief measures, including contributing to the salary costs of furloughed workers, which it reported should help lessen the negative effect of these closures on its business.

The German hotel group gradually reopens

Deutsche Hospitality has been working hard to establish a ‘new normal’ for the business since the emergence of Covid19. On 7 May, the group issued a press release entitled “Deutsche Hospitality starts up hotel operations again”, in which it outlined plans for a staged reopening of its properties to travellers, accompanied by strict new hygiene and restaurant guidelines. Interestingly, the company also pointed out that some of its hotels, including the Steigenberger Hotel am Kanzleramt in Berlin and the Steigenberger Airport Hotel Frankfurt, were kept open throughout lockdown to accommodate key workers, crisis team members and those travelling on urgent business.

“The staff at Deutsche Hospitality are very much looking forward to welcoming guests again,” said Thomas Willms, CEO of Deutsche Hospitality. “We are doing our utmost to ensure that you will enjoy the highest possible level of safety and comfort when you stay at our hotels.”

Of course, all eyes will now be on Deutsche Hospitality’s newly reopened properties to see how they perform in the new post-Covid19 world. If they can make a significant contribution to Huazhu’s bottom line, this will surely increase the likelihood that the Frankfurt-based hotel group can realise the schemes currently in its development pipeline, and perhaps even start the ball rolling on further projects in the coming months.

ABOUT THE CHAIN

The unique and varied Deutsche Hospitality portfolio includes the Steigenberger Hotels and Resorts, Jaz in the City, and IntercityHotels. Deutsche Hospitality was sold to chinese group Huazhu 2019.

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