European Hotel Industry Poised for a Solid 2014

London leads in developing boutique properties such as the Jumeirah Lowndes Hotel.

London leads in developing boutique properties such as the Jumeirah Lowndes Hotel.

The hotel industry across Europe is set up nicely for a healthy year. So says hotel consultancy HVS London, citing an uptick in demand from both leisure and corporate guests, transaction activity set to improve, and lending becoming more easily available. HVS was similarly bullish back in November.

Across Europe hotel development remains active, with 360 hotel projects ongoing, creating an additional 60,000 rooms. Many are expected to open in 2014, with the balance in 2015 and 2016. A further 450 hotels (70,000 rooms) are currently at the planning stages, with the majority of projects to be found in the UK followed by Russia, Turkey, Germany and France, according to HVS.

The consultancy also reports that some 45 percent of the new rooms under construction in Europe are in the upscale sector, rather than only the budget sectors. The luxury sector has now swung back to full health.

“There has been much talk about the growth of the budget end of the market, but operators are still keen to build prestigious hotels in key locations as consumer demand from Russia, China and the Middle East remains strong,” says HVS chairman Russell Kett.

London alone accounts for around 100 hotel projects currently at the planning stage, and there is still demand for individual properties in the capital as well as in the provinces.

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However, while hotel development and transactions look relatively positive, Kett urged operators across Europe, particularly those in upscale hotels, to adapt to the changing demands of the modern traveler who is now seeking a different sort of hotel experience, with genuinely courteous service, rather than bland, corporate responses.

“How much more refreshing it is when such attitudes come naturally to people, when staff delight in giving great service in a natural, unforced way, and when guests feel so happy about their experience that they do your marketing for you by telling their friends—little wonder that many boutique hoteliers recruit staff on the basis of their character and personality, rather than qualifications,” he says.

London has taken the lead in the development of alternative hotels, such as boutique properties and serviced apartments. These developments are meeting the needs of this more sophisticated demand base and ultimately this might stretch more into the UK regions.

“Boutique hotels have a great future ahead of them, not least in helping to re-educate the mainstream hotel sector in what the hotel business is all about,” says Kett.