In this roundup of news from Europe: hotel-performance metrics; Whitbread PLC announces job cuts; and more.
Hotel News Now each week features a news roundup from a different region of the world. This week’s compilation covers Europe.
Blaming COVID business drop, Whitbread lets go 6,000
On 22 September at a press call, Whitbread PLC, the parent company of Premier Inn, announced it was cutting its staff numbers by 6,000, with 4,500 of those coming from its hotel division. The call also gave some color as to its half-year earnings numbers due to be officially released on 27 October, writes Hotel News Now’s Terence Baker.
“It is with great regret that we have advised our teams this morning that we intend to commence a consultation process with our (United Kingdom) hotel and restaurant colleagues as the (U.K.) furlough scheme comes to an end,” said Whitbread CEO Alison Brittain, who added the move would ensure the firm emerges with a lower cost base, more flexible operating model and stronger resilience.
New UK COVID-19 restrictions could last until March
U.K. Prime Minister Boris Johnson announced new COVID-19 restrictions as new cases of the virus numbered approximately 4,300 on 21 September, the highest number since May and as the pandemic again picks up steam in many European markets.. The prime minister moved away from urging people back to the office to instead remain at home to work if able.
Among the new restrictions, pubs and bars from 24 September onward had to close down at 10 p.m., one hour earlier than the traditional time. Addressing the House of Commons, Johnson said, “We will spare no effort in developing vaccines, treatments and new forms of mass testing, but unless we palpably make progress, we should assume that the restrictions I have announced will remain in place for perhaps six months.”
STR: Europe hotel performance for August 2020
Europe’s hotel industry reported its best performance levels since February, according to August 2020 data from STR, HNN’s parent company, thanks to good weather and the opening up of some markets’ hotels in the last full month before schools reconvene.
In terms of Euro-constant currency for year-on-year August 2020 (not surprisingly, all metrics were negative), occupancy in the continent declined 44.6% to 43%, average daily rate declined 13% to €103.95 ($122.08) and revenue per available room declined 51.8% to €44.69 ($52.48). STR analysts said the absolute occupancy and RevPAR levels were up significantly from July but remained the lowest for any August on record in Europe.
German development optimistic, sees rise in aparthotels
Hotel construction continues in Germany despite the pandemic, with investors looking to Europe’s largest economy to set the tone for the rest of the continent, according to HNN’s Terence Baker. The German government announced it will prolong insolvency protection and most financial subsidies and aid, including furlough payments, until the end of 2021, and in some cases until spring 2022.
The growth of the service-apartment sector, or some blurring of it, will be the success story in upcoming years, said Reiner Nittka, CEO of GBI Holding AG, Germany’s largest hotel developer. He said in the face of reduced revenue, developers are homing in on expenses or considering developing new types of projects. “Transforming classic hotels is not easy and quite costly. With digitalization, hotels can catch up. But when it comes to the size advantage, even if it is sometimes only a few square meters, serviced apartments are clearly in a better position,” he added.
Italian hotelier sentiment generally negative
A survey conducted by business advisory Horwath HTL Italy and the Italian Hotel Association has shown that the overall sentiment in the country on post-COVID-19 recovery is “generally negative.” Italy was the first Western democracy to feel the full brunt of the pandemic.
The Italian hotel industry has requested of its governmental urgent and inclusive measures such as the cutting of regional and state taxes, the reduction of labor costs and improvement of the flexibility of the labor market. The study showed that in the first five months of 2020, overnight hotel stays decreased 63% year over year.
Deals and developments
- Radisson Hotel Group is to open a dual-branded hotel at London’s Heathrow Airport in and that will consist of a 258-room Radisson Red, that brand’s debut in the country, and a 600-room Radisson. No opening date has been announced;
- InterContinental Hotels Group has announced the debut of its Voco brand in France with the opening this month of the Voco Paris Montparnasse. It will be joined by siblings in Strasbourg by the end of this year, in Reims in 2021 and in Beaune, in the Burgundy region, in 2022;
- IHG also announced it opened a Hotel Indigo in the English city of Bath, a 166-room asset in a Georgian building dating to the 18th Century;
- According to the Irish Stock Exchange, United Arab Emirates firm Zahid Group Holding has increased its ownership in Ireland’s Dalata Hotel Group to 8.05%;
- Accor and owner Liverpool City Council are to open a new Novotel-brand flagship hotel in Liverpool, the Novotel Paddington Village. To be managed by Legacy Hotels & Resorts, the asset will have 221 rooms, 16 stories, making it the tallest hotel in the city, and an opening date in the second quarter of 2022;
- Four Seasons Hotels & Resorts announced it is to start management of the hotel San Domenico Palace in Taormina, Sicily, which following a renovation will be known as the San Domenico Palace, Taormina, a Four Seasons Hotel. It will have 111 rooms, with part of the hotel dating to the 15th Century when it was a monastery.
Compiled by Terence Baker.