Regional PRofile : EuropE
Slow-and-steady growth in Europe has even been described as a mask to long-term tourism decline . Recent data from ForwardKeys showed tourism in Europe was growing at an annual average rate of 3.7 % since 2007 , compared to a global average of 5.7 % over the same period . However , longhaul travel to Europe is coming off a positive third quarter and the upward trend in arrivals is set to continue , albeit slower than other regions around the world .
Western Europe ’ s consistency Naming the UK as a priority market , IHG reports especially solid RevPAR growth in the region , up 4.8 % in the third quarter of 2015 . Moving forward , it continues to stress the importance of smart , quality growth in the UK . Dublin-based Dermot Crowley , deputy chief executive of business development and finance at Dalata Hotel Group , attributes the UK ’ s strong performance to this year ’ s Rugby World Cup , adding that his company ’ s properties in Cardiff , Manchester and London have reported especially strong RevPAR numbers for the year . He also credits the election of a majority conservative government for providing political stability in the UK .
“ Management contracts are becoming more owner friendly ,” Crowley says . “ The industry appears to be going through structural change as the big brands move more to a franchise model with new third-party operators emerging .”
According to Stephen McCall , IHG ’ s chief operating officer for Europe , the company plans to continue growing in Western Europe . Over the past year , its InterContinental brand became the largest luxury hotel company in Portugal with the additions of InterContinental Lisbon and InterContinental Estoril . Other hotel companies see opportunity in Western Europe , including Wyndham Hotel Group ’ s commitment of 20 Ramada hotel openings in the UK over the next decade . Germany continues to show its prowess as an economy and hotel market with CBRE reporting “ above average growth within the Eurozone ” over the past several years . German hotels experienced positive RevPAR growth and occupancy has grown 3 % to reach almost 62 %.
IHG ’ s McCall says the company has signed 10 hotels in Germany in 2015 . In 2014 , IHG reported a record 12 signings , doubling the number of its signings in Germany in comparison to 2013 .
Concerns remain in Spain Spain , despite economic turmoil , is repeatedly a growing tourism market . A recent report by Real Capital Analytics indicated that Madrid has returned to the ranking of the world ’ s five most active real estate markets since 2008 . However , Ivar Yuste , founding partner at consultancy PHG in Madrid , predicts significant change in Spain ’ s historic political parties with the classical two-party system becoming a four-party system in the next election .
“ The fundamentals remain solid : Spain is the world ’ s second tourism destination in terms of revenue receipts and the world ’ s third in terms of passenger arrivals ,” Yuste says . “ Significant work still needs to be done by the servicers working for American funds that have taken on hotel collateral in the large debt portfolios they
With IHG ' s additions of the InterContinental Estoril ( pictured ) and InterContinental
Lisbon , the brand is currently the largest luxury hotel operator in Portugal .
have acquired . Dissecting these assets and putting them into value should generate ongoing activity for hotel asset managers .”
Madrid-based NH Hotel Group ’ s Group Senior Vice President of Development Claudio Capaccioli tells HOTELS that Spain has shown promising growth for NH in 2015 , but adds events such as political elections result in uncertainty . Barcelona has already been impacted by a new city government supportive of imposing limitations on the number of new hotel openings .
Opportunity amid crisis Although its current financial crisis is alive and well , Russia expects to see hotel development grow due to Moscow ’ s hotel market . Cushman & Wakefield Russia analysts predict Moscow hotel development may increase 40 % by the end of 2015 to 16,500 rooms , and 80 % in 2016 with growth expected to continue through at least 2018 .
“ The crisis has not had a catastrophic effect on the occupancy of local hotels ,” says Alexis Delaroff , regional director of AccorHotels in Russia and CIS . “ For Accor , 2015 has been a successful year in Russia , as we even achieved a small growth in some indicators of key performance .”
IHG also reports a positive outlook and is planning 70 new hotel openings in Russia by 2020 . www . hotelsmag . com December 2015 HOTELS 29