In this roundup of news from Europe: The continent sees continued improvement in performance metrics; Whitbread plans on eliminating operations manager role, and several deals and developments of note.
Hotel News Now each week features a news roundup from a different region of the world. This week’s compilation covers Europe.
STR: Europe hotel performance, August 2018
Europe’s hotel industry reported positive results in the three key performance metrics during August 2018, according to data from STR, the parent company of Hotel News Now. In year-over-year data in Euro constant currency terms, occupancy grew 1.4% to 77.9%, average daily rate grew 4.1% to €118.64 ($136.34) and revenue per available room grew 5.5% to €92.39 ($106.18).
Paris is one market continuing to see high percentage increases. For the same period, and also in the same currency terms, the French capital saw occupancy rise 13.9% to 75.6%, ADR rise 15.8% to €191.93 ($220.57) and RevPAR rise 31.9% to €145.01 ($166.65). STR analysts said the “absolute occupancy level was the highest for an August in Paris since 2013, while the absolute ADR and RevPAR levels were the highest for the month since 2014.”
UKHospitality releases workforce report
UKHospitality, the trade group representing the hospitality sector in the U.K., has released its U.K. Hospitality Workforce Commission 2030 report, which makes nine recommendations to boost employment in the sector, including a nationwide campaign to “eliminate negative perceptions of hospitality careers” and adjusting immigration policy so it is “evidence based, tailored to hospitality workforce needs.”
Labor woes are increasing in the U.K. as the ruling Conservative Party said it would target high-skilled workers, not low-skilled ones, following the U.K.’s divorce from the European Union, due to take place on 29 March, 2019. The U.K. depends on much of its hotel-industry labour from the EU. UKHospitality said it would continue to lobby government.
Whitbread to eliminate role of operations manager
Fresh from selling its Costa Coffee division to Coca-Cola, Whitbread PLC, which operates U.K. budget hotel chain Premier Inn, said it plans to eliminate or cluster the role of operations manager across its estate of approximately 800 hotels and reinvest saved money into new properties.
Whitbread executives told Reuters the plan would create new assistant manager and hotel manager posts and help it deliver growth plans and create 1,700 new jobs across Britain by investing around £300 million ($394 million) in 42 new hotel and restaurant openings over the next year.
With private equity’s exit, new investors eye Europe
European hotels and hotel companies will remain attractive investments as a result of the constant desire for global travel and the continued exit of U.S. private equity, according to panelists at the recent Hotel Investment in Europe Conference held in London, writes HNN’s Terence Baker.
Sources said hotels remain one of the more stable investments available and thus attractive to a new raft of investors, even though acquisitions require more homework than ever. “The market is becoming much more sophisticated and might not be driven by what happens in the U.S. It is market-driven,” said Steffen R. Doyle, managing director, Credit Suisse.
Spain’s NH Hotels emerges strong after owner transition
NH Hotels executives say the Spanish company has both the brands and the know-how to thrive in its major markets, writes HNN’s Terence Baker. The firm’s bosses also believe it has emerged from several years of discord among its principal stakeholders, with the recent presence of Thailand’s Minor International, which now owns 45% of NH Hotels’ shares.
In July, NH Hotels announced that its earnings before interest, tax, depreciation and amortization for the full year was €260 million ($298.9 million), and Hugo Rovira, managing director, southern Europe and U.S., added “in 2017, we saw a 6.5% increase in turnover to more than €1.5 billion ($1.72 billion).” Minor increased its stake this year by buying a 25.2% stake held by Chinese company HNA Tourism Group that was valued at €619 million ($711.8 million).
Does it feel like yesterday?
September 2018 marks the 10th anniversary of Hotel News Now, as well as the 10th anniversary of the beginning of the global financial crisis, so HNN is looking back at those tumultuous times through the eyes of today’s leading hoteliers who experienced the recession.
Those Europe-based enjoying success today saw 2008 and the tumultuous years that followed as the perfect opportunity for educating themselves and their teams. Keith Barr, CEO, InterContinental Hotels Group, said he “learned a lot about the resilience of our business and the importance of great owner relationships,” while Thomas Willms, CEO, Deutsche Hospitality and Steigenberger Hotels AG, said flexibility and variety were key lessons, saying important is to concentrate on “niche markets, e.g. sports, which are not as much prone to economic developments and can help to overcome losses of business.”
For more European and global insight into the recession and the very interesting 10 years since and up to today, click here.
Deals and developments
- Radisson Hotel Group opened the 162-room Radisson Blu Hotel, Trabzon, on the Turkish Black Sea coast, the 21st asset for the firm in Turkey. It is being operated by Radisson Hospitality AB under an international license agreement;
- Mandarin Oriental Hotel Group has signed a management contract with owners Capital group on the 65-room Mandarin Oriental, Moscow, which is due to open in 2021 complete with 137 branded residences;
- Situated in Bethnal Green, and close to Shoreditch, the East London Hotel, owned by Definition Capital, opened with 161 keys;
- InterContinental Hotels Group has signed its Kimpton Hotels brand into Barcelona, with the second-half 2019 opening of the 156-room Kimpton Barcelona. The developer is Spanish developer and owner Casacuberta;
- UBM hotels Management GmbH, a subsidiary of UBM Development AG, and Austrian hotel operator Vienna International Hotelmanagement AG, also known as Vienna House, have agreed a joint venture to develop and franchise assets in Central Europe. The two projects that are part of the deal are the 279-room Holiday Inn Munich Leuchtenbergring and 207-room Holiday Inn Munich Westpark;
- Amsterdam-based Cycas Hospitality has signed a management agreement to open the first Hyatt Place property in London. The 280-room Hyatt Place London City/East is due to open in 2020 in association with developer Berkeley Capital Group.
Compiled by Terence Baker.