European Chains & Hotels Report 2019 Contents Welcome to Horwath HTL, the global leader in hospitality consulting. We are the industry choice; a global brand providing quality solutions for hotel, tourism & leisure projects. Page 5 Forward Page 32 Albania Page 7 Introduction Page 36 Croatia Page 42 Cyprus Page 10 Chain Hotels & Brands Page 46 Denmark Page 14 Year-on-Year Growth Page 50 France Page 16 Supply Page 56 Germany Page 18 Chain Hotels & Rooms Page 62 Greece Page 22 International Capital Flows Page 68 Hungary Page 24 Investment Page 74 Ireland Page 26 Openings & Deal Signing Page 80 Italy Page 28 Business Model Page 86 Montenegro Page 92 Netherlands Page 98 Norway Page 102 Poland Page 108 Portugal Page 114 Serbia Page 120 Slovenia Page 126 Spain Page 132 Sweden Click on this icon for easy navigation Page 136 Switzerland of the document Page 142 Turkey Page 148 United Kingdom Horwath HTL l European Hotels & Chains Report 2019 3 Forward The report looks at the relationship between hotel chains, their myriad of brands, and the wider world of hospitality and lodging. A very warm welcome to the new edition of the Horwath We look at the models used by the chain companies HTL Chains & Hotels Report, the third annual instalment. and see which ones are the most prevalent, in which The report looks at the relationship between hotel chains, market segment. and their myriad of brands, and the wider world of hospitality and lodging. In this edition, we have enhanced the report in a number of key ways. Firstly, we have greatly expanded the scope There have been two big stories over the last 25 years of the markets, from 12 last year to 22 this. Our goal is in the industry, and we look at them both in the report. to cover every market in Europe and we are well on the way to achieving that. Secondly, we have added a lot of The first has been the inexorable growth and expansion information about hotel ownership; who has been active of branded hotels and their wider significance in the buying and selling hotels, what were the biggest deals landscape of hospitably. Every year sees the creation and done last year and where is that money coming from. introduction of more and more brands, both international Lastly, we have been able to identify and highlight where and domestic, as a way to drive market share through next years deals have been signed and when these new identity, segmentation and increasing scale. This is being hotels are likely to open. done in a variety of ways, either through the introduction of brands with a proven track record in other countries, All in all, it is a comprehensive look at a vibrant hotel the creation of new brands from scratch or the slicing and market, one that has had significant growth over the last dicing of existing brands to make them go further. few years. We hope you enjoy reading the report as much as we enjoyed putting it together. The second large trend has been the change in the model for owning and operating hotels. What impact has this James Chappell asset light approach had on growth? What is interesting, Horwath HTL Global Business Director and a complicating factor, is how each market has a different tolerance for each model and how that can work for/against chains trying to sign more deals. Horwath HTL l European Hotels & Chains Report 2019 5 Introduction For this latest edition, we have collected much more information. We have data on business models, transaction and investment numbers as well as the number of hotel deals being signed. In the compilation of the data, we asked our offices to In order to standardize the data, we looked at the same not rely on available local data, but to create our own KPI’s across all countries using the same methodology: databases from scratch. Once that was done, we checked • Total number of chain hotels our results with institutional data providers who have • Total number of chain rooms comprehensive numbers on hotels, restaurants, hostels • Average size per chain hotel in rooms and all the rest. • Country hotels stock (overall supply) • Country rooms stock (overall supply) We then dug deeper into each market to get an • Average size per hotel in rooms understanding of the players, and what size and scope • Chain penetration % by hotels they have. We looked at overall ranking by size in each • Chain penetration % by keys country, by overall group (hotels and rooms) and by • Total number of brands brand. We broke the information down by domestic and • Domestic brands international groups and brands, and then by scale/style • International brands of hotels. • Second tier operated hotels • International chain hotels (incl. double counting) For this latest edition, we have started collecting much • Domestic chain hotels (incl. double counting) more information on business models, looking at the • International chain rooms (incl. double counting) four main types; namely owner operator, management • Domestic chain rooms (incl. double counting) contract, franchise and lease. We don’t have all of this information for all hotels, but we have enough to show James Chappell us the general trends and see which models are popular Horwath HTL Global Business Director where. We also look at ownership details, and are grateful to include information from the leading collector and exponent of this information, Real Capital Analytics. RCA collect transactional data across all real estate classes and are a wealth of information about the movers and shakers in the hotel world. Horwath HTL l European Hotels & Chains Report 2019 7 Chain Hotels & Brands Chain Hotels & Brands 250 253 240 222 200 209 For the 12 markets where we have YoY 187 159 150 150 data, there has been a significant amount 143 131 120 of growth of Chain hotels in 2018. There 100 107 97 89 80 73 70 70 68 69 was a total of 686 new hotels, equating to 66 63 60 50 50 50 51 45 43 44 41 43 28 39 25 23 19 19 26 26 13 13 7 73,802 rooms, which is just over 4% growth. 22 21 21 22 4 19 16 16 7 19 7 6 5 10 10 3 4 12 13 2 11 1 12 2 22 0 n s y y a ai ly y y d ro UK rke g Sp Ita eece ance eden yprus r erland oland Tu rtugal elan orwa Serbi lbania G Fr P Ir Sw N tene C A Hungar Po Denmark Slovenia German etherland witz N S Mon Total Market Brands CHAINS & PENETRATION BRANDS For this edition of the report, we have collected data from In terms of the total number of brands, the average 22 European countries, ten more than last year, and have country has 82 hotel brands present. This range goes Country Hotels % Rooms % Domestic International Total year to year data from 12. This means a really fascinating from Albania with 4, to Spain with 253. Spain has the Albania 12 2% 736 6% 2 2 4 spread from countries like Albania with 12 Chain hotels most domestic brands, 187, whilst Germany has the Croatia 186 26% 33,939 58% 22 21 43 all the way to France with 3,885. The spread and the scale most International brands with 131. Cyprus 51 22% 9,701 17% 2 5 7 of the market is impressive, let’s start with some overall Denmark 133 23% 23,377 50% 4 19 23 numbers. Growth France 3,885 21% 320,060 49% 50 70 120 For the 12 markets where we have year on year data, Germany 2,217 11% 317,325 38% 89 131 222 The market (22 countries) has a grand total of 146,616 there has been a significant amount of growth of Chain hotels, which accounts for just over six million bedrooms. hotels in 2018. There was a total of 686 new hotels, Greece 730 7% 100,021 24% 164 47 209 The average number of rooms per hotel in the market is equating to 73,802 rooms which is just over 4% growth. Hungary 159 15% 22,093 36% 10 41 51 61, and range from a massive 238 in a resort destination Ireland 185 22% 24,927 41% 7 21 28 like Cyprus, to 20 in Albania. Two of the largest markets, In contrast, the overall market grew by less than 1%, Italy 1,584 5% 171,845 16% 143 97 240 France and Spain, have a very disparate number with meaning that if you take out new build hotels, the overall Montenegro 25 8% 4,113 25% 2 11 13 the average French hotel having just 36 rooms and the market probably lost more independent hotels than they Netherlands 663 19% 76,133 59% 39 68 107 average Spanish hotel 94. gained. The total number of brands grew 7%, or 102. This Norway 299 27% 49,335 56% 6 13 19 doesn’t mean 102 new brands entered the market, but Chains brands entered into markets they had not been in before. Poland 366 14% 50,484 37% 26 43 69 For the Chain Hotel market, there are 18,575 hotels with Portugal 336 26% 43,069 44% 19 26 45 a total of 2,289,879 million bedrooms. This means that Serbia 22 6% 3,520 19% 1 12 13 Chain hotels make up 13% of the overall hotel market, James Chappell Slovenia 78 24% 8,590 44% 7 12 19 Horwath HTL Global Business Director but represent 38% of the room market.