Europe's hotel-construction pipeline hitting all-time highs

Ibis Budget Amsterdam City South, the Netherlands. Image: AccorHotels Group (U.S.-based hotel manager Interstate Hotels & Resorts has appointed Greg O'Stean as chief development officer for the company's North America division.)

Europe’s total hotel-construction pipeline—in a three-year surge—stands at 1,449 projects with 228,588 rooms, according to the latest data from Lodging Econometrics

The region has 749 hotel projects with 120,689 rooms currently under construction, 395 hotels with 61,707 rooms planning to start construction in the next 12 months, and 305 hotels with 46,192 rooms in the early-planning stage. 

The total pipeline increased 18 percent by projects and 21 percent by rooms year-over-year, and each of the three project stages are at or near the highest project and room counts since LE began recording in the region in 2008, according to the company. 

The LE forecast for new hotel openings anticipates an increase in hotels coming on line as new supply over the next several years. Right now, 289 new hotels with 38,124 rooms have opened year-to-date, and 88 hotels with 11,954 rooms are expected to open in fourth quarter for a total of 377 new hotel openings (representing 50,078 rooms) for 2018, the highest number of such openings ever recorded by LE. 

Looking ahead, LE expects 2019 to have 390 new hotels open with 58,364 rooms, and 390 hotels/58,599 rooms to come online in 2020.

Top Companies, Top Brands

Europe’s top hotel companies with projects in the construction pipeline are AccorHotels, at an all-time high with 225 projects and 29,613 rooms; Marriott International with 186 hotels and 31,192 rooms; Hilton with 170 hotels and 26,988 rooms; IHG with 139 hotels and 23,540 rooms. 

These four companies make up 50 percent of the total hotel-construction pipeline in Europe. That percentage is expected to rise as some 21 percent of the projects in the pipeline have yet to choose a brand.

The leading brands for each of these top companies are AccorHotel’s Ibis brands with 118 hotels and 14,635 rooms, Mercure Hotel with 25 hotels and 2,346 rooms and Adagio City Aparthotel with 22 hotels and 2,976 rooms; Marriott International’s Moxy with 58 hotels and 10,227 rooms, Courtyard by Marriott with 33 hotels and 5,943 rooms, and Autograph Collection with 15 hotels and 2,031 rooms. In addition, Hilton's Hampton Inn pipeline has 67 hotels with 10,447 rooms, Hilton Garden Inn has 46 hotels and 7,316 rooms, DoubleTree by Hilton has 22 hotels and 3,132 rooms. IHG’s Holiday Inn Express pipeline has 65 hotels and 9,813 rooms, Holiday Inn has 36 hotels and 7,981 rooms and Hotel Indigo has 14 hotels and 1,733 rooms. AccorHotels and Hilton’s pipelines are at new highs while Marriott and IHG are very close to their cyclical highs, according to LE.

Top Countries, Top Cities

Europe’s leading countries in the hotel-construction pipeline are Germany with 265 hotels and 49,640 rooms (somewhat above STR’s estimate); the United Kingdom with 256 hotels and 39,008 rooms; France with 144 hotels and 17,003 rooms; Portugal with 87 hotels and 9,012 rooms; and Poland with 86 hotels and 13,134 rooms. With the exception of the United Kingdom, these markets all have construction pipelines at cyclical highs, the LE data indicated.

The European cities with the largest pipelines are London with 82 hotels and 14,663 rooms; Paris with 45 hotels and 6,947 rooms; Düsseldorf with 40 hotels and 8,353 rooms; and Frankfurt with 30 hotels and 6,228 rooms. These cities are followed by Lisbon with 30 hotels and 2,800 rooms; Istanbul with 29 hotels and 5,386 rooms; and Moscow with 29 hotels and 6,512 rooms.