Print Preview : Hotel supply to stagnate in 2009

Hotel supply to stagnate in 2009
The current global economic crisis is expected to have an affect on overall hotel supply, as many projects are put on hold or cancelled altogether. Hotel performance indicators and the hospitality industry fighting back the global economic crisis in 2009 are the main topics of discussion at this year’s Global Lodging Forum, held at Four Seasons George V Paris, March 5 and 6.

“Developments were not held back in 2008, as many projects were already underway. However from now on and throughout the next year or so, caution will be the key word,” warned Director of Development, MKG Hospitality, Vanguelis Panayotis. “It is very likely that the current crisis will be visible in hotel supply in the years to come. There are already less projects in the pipeline.”

Even before the crisis occurred, Spanish group NH Hotels pulled back on their three year expansion plan, which included the opening of 18,000 rooms between 2007 and 2009. Having reached the halfway point to this goal, the group will momentarily limit its development to management and leasing agreements, two formulas that implicate no financial investment by the group.

Sol Melia also adapted its strategic plan for 2008-2010, limiting investment in the growth of its brands to 100 million euro rather than the 200 originally planned.

Accor has been no exception. While its vast global development programme for 200,000 new rooms has not been abolished, it has been postponed to 2011 and not 2010 as originally planned. Throughout 2008, the French-based group also continued to reorganise its supply in an effort to establish the best positioning for its hotels.

IHG, the number one group worldwide, strengthen its ranking as number two in Europe, at the expense of Best Western. Express by Holiday Inn continued to be a driving force in the economy category, whilst in the upscale segment, Crowne Plaza is undergoing expansion across Europe, the Middle East and Africa (EMEA).

Following an intense reorganisation phase linked to the takeover of Starwood Capital, Louvre Hotels is leaping into the future, unveiling new concepts for Kyriad and Premiere Classe, as well as the pursuit of Campanile’s vast renovation plan. With more than 100 hotels and 22,000 rooms under development, Rezidor has one of the largest growth plans in EMEA. In terms of supply, this will bring the group very close to leaders Accor and IHG.

According to MKG Hospitality database, Accor remains Europe’s largest hotel group in terms of hotel room supply, with over 18% market share. Even though the group experienced only a 0.6% growth, brands Ibis, Mercure, Novotel and Etap Hotel all feature in Europe’s top 10 largest hotels. IHG, who saw a 3.5% increase in room inventory is the next largest group with over 6% share, followed by Best Western who has a 6% share but experienced a 6.5% growth. Among the top 10 groups, Whitbread experienced the largest growth in 2008, with a 12.4% increase in room supply, mainly due to its brand Premier Inn, leader in the economic segment in the UK.

“Despite concerns, Western Europe still has growth potential for chain hotels, as penetration rate is still far less than in North America. Meanwhile, Central and Eastern Europe are particularly interesting markets for developments,” concluded Panayotis. Theodore Koumelis - Friday, March 06, 2009