Europe reports boost in hotel construction: STR

According to the numbers, it’s a good time to be a hotelier in Europe, even though hotels across the pond are starting to encounter the same supply challenges found in gateway markets in the U.S.
Germany is leading Europe's hotel-construction pipeline with 52,704 rooms. Photo credit: IHG

According to STR’s latest data, Europe's hotel-construction pipeline has 1,504 projects with 192,352 rooms as of July, representing a 52.4 percent year-over-year increase in the number of rooms in the final phase of the development pipeline. 

A majority of the region’s rooms currently under construction are in three segments. Of those, unaffiliated projects represented the largest percentage increase (up 100.3 percent) in activity year over year, with 56,174 rooms underway. The pipeline also has 41,143 upscale rooms in development, up 37.4 percent from last year, while the upper-midscale segment was up 34.1 percent with 31,739 rooms.

Four countries reported more than 8,000 rooms under construction. Germany led with 52,704 rooms, which represented 7.9 percent of the country’s existing supply, followed by the United Kingdom (42,260 rooms, 6.3 percent of existing supply). Spain was next with 12,588 rooms (2 percent of current supply) and France followed with 8,840 rooms (1.6 percent of existing supply.)

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Across Germany, the average value per room in 2018 was approximately €145,200, around €4,700 higher than the prior year, according to a July report from Union Investment. The average value for an upscale hotel was approximately €165,000, while the figure for a midscale or budget hotel was approximately €119,400.

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