Chain hotel market stabilises, boosted by budget demand
Figures released by the hotel and catering consultancy reveal there were over 23,000 new hotel chain rooms in Europe in January 2011 compared to the previous year, marking a growth of 1.6 per cent.
However, despite the positive growth, the market has slowed down compared to previous years as there is a lag in timing.
“Despite still recording positive growth, this is a slowdown compared to previous years, as there is a lag in timing, said director of development at MKG, Vanguelis Panayiotis.
“Projects are signed when market condition are good (hotel performances and financing). Since these conditions were bad during the crisis, fewer projects were signed, consequently impacting stock results in subsequent years – hotel projects normally take around two years to break ground,” he said.
Top ten European hotel chains
The top ten hotel groups in the European Union, as recorded on 1 January 2011, were:
- Accor
- Best Western
- Intercontinental Hotel Group
- Grouped u Louvre
- NH Hotels
- Carlson Europe / Rezidor
- Sol Melia
- Tui
- Hilton International
- Whitbread
Over the past year, Accor added 41 hotels to its European business, growing its portfolio to 2,272 hotels. This places it by far ahead of the second largest European hotel chain group, Best Western, which had 1,309 hotels in 2011.
Carlson was the fastest growing hotel group last year, with an extra 19 hotels brining its total up to 247, a growth of almost 11 per cent.
Whitbread, which came in tenth position, continues to largely target only the UK with its chain brand Premier Inn. The group last year added nine new hotels to its portfolio, a growth of almost 5 per cent to 588 hotels (and 40,975 rooms) in total.
Budget hotels
The budget hotel chain sector as a whole recorded the most growth in the period.
MKG’s latest figures show that there were 3,918 new rooms (or 4.1 per cent growth) in the budget sector, and 7,756 new rooms (3.2 per cent growth) in the economy sector.
The sector as a whole has been lead by aggressive expansion by Travelodge, which added 58 new properties to its portfolio in the period, marking an 11 per cent growth.
The chain currently has 35 hotels and 3,700 rooms under construction, and is on track to meet its ambitious goal of 1,100 hotels and 100,000 rooms by 2025, said MKG.
The growth in budget and economy hotels in the UK has pushed up overall chain hotel demand in the country.
Between 2000 and 2010, MKG notes that the UK’s chain supply grew by over 47 per cent to reach 251,323 rooms.
The number of chain rooms sold increased by over 42 per cent, making the UK the best performing market in the decade in terms of demand and chain hotel supply, with an average occupancy rate of 73.5 per cent.
