In the 2018 year-end report by Lodging Econometrics (LE), Europe’s total construction pipeline skyrocketed to 1,569 projects/243,947 rooms, a whopping 19% increase year-over-year (YOY), and the highest project and room counts ever recorded. The record counts come despite concerns of slower growth throughout the region, shrinking demand for the region’s exports, Brexit uncertainties, and political tensions in many countries.
There are 784 projects/124,674 rooms currently under construction, 434 projects/68,128 rooms planning to start construction in the next 12 months, and 351 projects/51,145 rooms in the early planning stage. The total pipeline and all three stages of the pipeline have counts more than double their cyclical lows set earlier in the decade.
Announced renovation and conversion counts are also booming with 400 projects/55,787 rooms, up 16% by projects, a record high and up 21% by rooms YOY.
In 2018, 386 new hotels with 53,236 rooms opened throughout Europe, the highest number of new hotel openings ever recorded. Because of the robust construction pipeline, the LE forecast for new hotel openings will continue to be strong with 382 new hotels/53,252 rooms anticipated in 2019 and 386 new hotels/59,861 rooms in 2020.
Franchise companies with the largest construction pipelines are AccorHotels with 257 projects/34,606 rooms and Marriott International with 215 projects/35,789 rooms. Next is Hilton Worldwide with 173 projects/26,684 rooms, and InterContinental Hotels Group (IHG) with 147 projects/24,861 rooms. These four companies are responsible for 50% of the projects and rooms in the total pipeline. AccorHotels, Marriott International, and IHG set new record project counts in their European pipelines.
The leading brands for each of these top companies are AccorHotel’s Ibis brands with 138 projects/17,369 rooms, Novotel with 26 projects/4,426 rooms, Adagio City Aparthotel with 25 projects/3,236 rooms, and Mercure Hotel with 25 projects/2,656 rooms. Marriott International’s top brands are Moxy 69 projects/12,479 rooms, Courtyard by Marriott 33 projects/5,788 rooms, and the Autograph Collection 17 projects/2,324 rooms. Hilton Worldwide has Hampton Inn with 67 projects/ 10,309 rooms, Hilton Garden Inn 47 projects/6,960 rooms, and DoubleTree by Hilton 25 projects/3,371 rooms. IHG’s include Holiday Inn Express with 74 projects/11,176 rooms, Holiday Inn 34 projects/7,887 rooms, and Hotel Indigo 14 projects/1,780 rooms.
Many brands have hit all-time records at year-end including Novotel, Adagio City Aparthotel, Moxy, Courtyard, the Autograph Collection, DoubleTree, and Holiday Inn Express.
Europe’s leading countries in the construction pipeline are Germany with 283 projects/52,569 rooms, the United Kingdom with 266 projects/38,590 rooms, France with 167 projects/20,479 rooms, Poland with 97 projects/14,958 rooms, and Portugal with 96 projects/10,206 rooms. With the exception of the United Kingdom, these markets all have construction pipelines at record highs.
The cities with the largest pipelines are London with 80 projects/13,516 rooms, Paris with 54 projects/8,093 rooms, Dusseldorf with 50 projects/10,032 rooms, Istanbul with 31 projects/5,566 rooms, and Lisbon with 30 projects/2,911 rooms. Frankfurt follows with 29 projects/5,694 rooms, Warsaw with 29 projects/5,390 rooms, and Moscow with 28 projects/5,881 rooms. Warsaw, Dusseldorf, and Budapest have pipelines greater than 20% of their current census indicating the possibility of absorption problems should economic growth trends soften further.