New brands driving market share in Europe: Horwath HTL

Radisson Red Warsaw
By 2021 more than 21 new hotels will be open in Warsaw, creating a new supply of 4,400 hotel rooms. Photo credit: Radisson Hotel Group

The third annual Horwath HTL Chains & Hotels Report, released during last week’s International Hotel Investment Forum in Berlin, looks at the relationship between hotel chains, their brands and the wider world of hospitality and lodging. 

Notably, the report examines two big trends that have shaped the hospitality industry over the past 25 years. The first has been the “inexorable growth and expansion” of branded hotels and their wider significance in the landscape of hospitably. New brands, the report claims, are a way to drive market share through identity, segmentation and increasing scale. This is being done in a variety of ways, either through the introduction of brands with a proven track record in other countries, the creation of new brands from scratch or the slicing and dicing of existing brands to make them go further. 

The second trend has been the growing popularity of the asset-light model for owning and operating hotels. 

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The 12 markets where Horwath has year-over-year data reported a significant amount of growth of chain hotels in 2018 for a total of 686 new hotels with 73,802 rooms, which is just over 4 percent growth.

Total Market

For this edition of the report, Horwath collected data from 22 European countries—10 more than last year—and has year-over-year data from 12. This means a spread from countries like Albania with 12 chain hotels all the way to France with 3,885. The sample market has a total of 146,616 hotels, which accounts for just over six million bedrooms. 

The average number of rooms per hotel in the market is 61, and they range from 238 in a resort destination like Cyprus to 20 in Albania. Two of the largest markets, France and Spain, have a very disparate number, with the average French hotel having 36 rooms and the average Spanish hotel 94. (Supply shortages in certain Spanish markets like Madrid, Barcelona, the Balearic Islands and Costa del Sol are reducing yield potential to an “unacceptable level” for some investors, the report noted.)

Increasing ADR and occupancy in major Polish cities has encouraged investment, with new brands and chains entering the market with “incredible speed,” the report claimed. Based on initial announcements, by 2021 more than 21 new hotels will be open in Warsaw, creating a new supply of 4,400 hotel rooms (30 percent of current room supply). The Tricity market (Gdansk, Gdynia and Sopot) will get at least nine new hotels within the next three years, creating a new supply of more than 1,900 hotel rooms which also is an increase of 30 percent. 


The Chain Hotel market has 18,575 hotels with a total of 2,289,879 million guestrooms, with chain hotels making up 13 percent of the overall hotel market and 38 percent of the room market. Not surprisingly, the average size of chain hotels is more than twice the size of the whole market at 131 rooms. The spread is much more even here, the report notes, representing the consistency of hotel brands, with 19 out of the 22 markets having average chain room numbers of between 106 and 190.


In terms of the total number of brands, the average country has 82 hotel brands present. This range goes from Albania with four to Spain with 253. Spain has the most domestic brands at 187, while Germany has the most international brands at 131.


For the 12 markets where Horwath has year-on-year data, there was a significant amount of growth of chain hotels in 2018. A total of 686 new hotels opened during the year with 73,802 guestrooms and just over 4 percent growth. 

In contrast, the overall market grew by less than 1 percent; apart from new-build hotels, the overall market probably lost more independent hotels than it gained, according to the report. A full 102 brands entered into markets they had not been in before for 7 percent growth.