European hotel pipeline booms despite Brexit: Rolf W. Schmidt [Download presentation]
TOPHOTELPROJECTS Founder & CEO R. W. Schmidt tells delegates at TOPHOTELWORLDTOUR London that the European hotel pipeline will yield 1,548 projects in the coming years.
For investors and hotel owners who operate in Europe, there is cause to celebrate, as a new report indicates that the market in Europe is hitting record highs in terms of development. This was the main takeaway of a report presented by TOPHOTELPROJECTS Founder and CEO Rolf W. Schmidt at TOPHOTELWORLDTOUR London 2020, held at the Conrad St. James on February 6.
During the event, Schmidt presented a new report with figures which show a booming hospitality market across the European continent. Europe boasts 1,548 projects in its pipeline, which will add an additional 263,948 rooms to its hotel stock. These figures point to a lack of concern around the aftermath of Brexit, following a period of uncertainty as the UK dithered about how and when they would leave the EU.
UK comes out on top
Perhaps one of the most surprising statistics from Schmidt’s presentation was the fact that the UK is still the top country for hotel development in Europe, signalling a return to form for the country that has been a thorn in the side of the EU for the past three and a half years as Brexit negotiations trundled on.
According to numbers from the TOPHOTELCONSTRUCTION hotel database, the UK has 363 projects in the pipeline, set to deliver 53,226 rooms by 2024. These will no doubt accommodate the increased tourism levels in Europe, which are set to rise by 4% in the coming years, Schmidt reported. Naturally, most of these new projects will be based in London, which came in at No. 1 on the leaderboard with 90 hotels in development, followed by Dublin, which has an impressive pipeline of 32, given the size of the Irish capital.
Schmidt cast the net beyond Europe, looking at other international markets. The trend of rising tourist numbers can be seen across Asia Pacific, the Americas and the Middle East, and as Schmidt said, “The money will land somewhere, so regional opportunities will be invested in as they present themselves.”
After a dip in hotel investment over the past number of years, North America is seeing a big investment boom owing to the strength of the economy in the US, which has overtaken China as the world’s biggest project pipeline. This will no doubt play into the tug of war going on between China and the US, and it remains to be seen if China will manage to topple the US as the months go on.
Mexico also got an honourable mention, with Schmidt saying that it’s hotel market is stable because of strong governmental support. Australia too is looking good, showing an increase in market activity over the past three or four years.
Key brands in Europe
Schmidt asserted that his numbers were based on the first class and luxury segments, but asked attendees the question, “What exactly is a 4-star hotel?”. He used the example of Citizen M to expand the point that first class, or upscale, hotels can be difficult to define, having, for example, a 5-star lobby but a 2-star room owing to the room size. One anomaly that the TOPHOTELCONSTRUCTION figures threw up was the fact that Hilton has overtaken Marriott as the No. 1 hotel group by number of projects in Europe right now (Hampton by Hilton has 48 properties in development).
Schmidt asked delegates in London to consider, “Why is there a huge number of new brands being developed?” His answer was thus: “Officially, it’s to focus on new target groups, but the real reason is they want to appeal to investors with sexy new brands.” He added that groups also want to have the footprint of brand in a certain region, as it is difficult to double up on the same brands in one destination. Another benefit is that adding another brand encourages customers to sign up to a group’s loyalty scheme.