In Lodging Econometrics (LE) Year-End 2021 Hotel Construction Pipeline Trends in Europe report, analysts report that the hotel construction pipeline in Europe stands at 1,824 projects and 295,152 rooms at the end of the fourth quarter.
From 2014 to 2020, the construction pipeline in Europe has seen a steady year-on-year (YOY) increase in the total number of projects. Beginning in the second quarter of 2021 and continuing throughout the year, this trend reversed, with the region’s construction pipeline totals falling slightly below year-end 2019 totals. of projects is due to development and opening delays, project cancellations, as well as other COVID-19 pandemic-related project hurdles, such as supply chain and labor shortages labor, as well as the increased cost of labor and materials.
Nevertheless, with some of the most popular tourist destinations in the world, Europe has seen an increase in domestic and inter-regional travel over the past year. International arrivals in Europe increased by almost 75% year-on-year. Hotel performance is an important driver of hotel development and therefore there is optimism that delayed projects may soon come back online.
In Q4 ’21, projects under construction amounted to 860 projects/142,898 rooms, down 11% per project and 9% per room YOY. Projects scheduled for construction in the next 12 months stand at 470 projects/72,194 rooms, down 1% per project and 3% per room year-over-year. Both early planning stage projects and room counts were up 7% year-over-year, ending the fourth quarter with a record 494 projects representing 80,060 rooms, also a record number of rooms for this stage in the region.
Announced renovation and conversion projects and room counts are up at the end of the fourth quarter, with a record 433 projects/62,368 rooms, up 19% per project and 21% per room YOY. Conversions in Q4 ’21 peaked at 293 projects and 40,088 rooms and renovations closed the quarter at 140 projects/22,280 rooms.
The UK leads the build pipeline with Q4 21 projects and rooms count, with 313 projects/48,770 rooms. The United Kingdom is closely followed by Germany with 277 projects/48,827 rooms, then France with 159 projects/19,003 rooms. Next come Portugal with 119 projects/14,362 rooms and Poland with 85 projects/12,285 rooms.
The cities in Europe with the largest hotel construction pipelines are London, UK, with 83 projects/14,768 rooms, Düsseldorf, Germany, with 53 projects/9,999 rooms, and Paris, France, with 37 projects /6,036 rooms. Next comes Lisbon, Portugal, with 34 projects/3,822 rooms, followed by Istanbul, Turkey, with 31 projects/5,986 rooms.
With a record number at the end of the fourth quarter, Accor leads the franchise companies in Europe with the largest pipeline of projects, at 300 projects/42,846 rooms. Accor is followed by Hilton Worldwide with a record number of projects for the company of 216 projects representing 33,130 rooms. Marriott International comes next, with 211 projects/33,353 rooms. Marriott is followed by InterContinental Hotels Group (IHG) with 158 projects/23,486 rooms. These four companies represent 49% of the projects in the total pipeline.
The best brands in Europe in Q4 21 are led by the Ibis brands of Accor with 103 projects/12,505 rooms, then Mercure, with a record number of projects and rooms, with 31 projects/4,169 rooms. Hilton Worldwide’s top brands in the fourth quarter were its Hampton by Hilton brands with 84 projects/12,911 rooms and its Hilton Garden Inn brand with 47 projects/8,005 rooms. Marriott International’s top brands in the fourth quarter are Moxy with 51 projects/8,684 rooms and Courtyard by Marriott with 23 projects/3,959 rooms. IHG’s top brands in the fourth quarter are Holiday Inn Express with 64 projects/9,403 rooms and its Holiday Inn brand with 22 projects/4,403 rooms.
During the fourth quarter of 2021, Europe opened 87 hotels/12,204 rooms, for a total of 427 hotels and a record 62,272 rooms in 2021. LE expects the opening of an additional 474 new hotels, representing 70,242 rooms , in 2022 and another 504 new hotels with 75,015 rooms to open in 2023.
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