Global hotel pulse: Europe news
In this roundup of news from Europe: Accor posts strong first-quarter earnings; Fattal plans to roll out its Leonardo brand across the United Kingdom and Ireland, and a host of hotel deals and developments.
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- May 4, 2019
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Accor sees strong Q1 as it starts four-year EBITDA boost
Backing up its previously stated mission to boost earnings before interest, depreciation, taxes and amortization to €1.2 billion ($1.3 billion) by the end of 2022, Accor posted strong first-quarter 2019 numbers, the highlight of which was a record revenue for the period of €987 million ($1.1 billion), an 8.8% like-for-like increase.
CFO Jean-Jacques Morin said Accor’s current earnings statement “demonstrates the resilience of our business model. We expect an improvement of the momentum across the year and confirm the 3% (revenue per available room) growth full-year target that was mentioned in February. Core business Hotel Services saw revenue grow 7.3%, which Morin said is fueled by an organic system growth of 5.6% and a consolidated RevPAR of 1.6%.
Fattal to roll out Leonardo brand in UK, Europe
Israeli hotel firm Fattal will concentrate on rolling out its Leonardo and Nyx brands in the United Kingdom and Ireland, while the future of its Jurys Inn brand—which it bought in late 2017 in partnership with Swedish hotel firm Pandox—will be discussed later this year, according to sources. The deciding factor on that and the overriding push from Fattal across the newly enlarged portfolio is return on investment.
Speaking with HNN, Fattal’s CEO of Europe Daniel Roger said, “Israel is a small country. Lots of Israeli investors are with the U.S. brands, and they get their 1.5% return. That’s fine, but we are looking for something more”
Jason Carruthers, managing director of Jurys Inn, said no decision has been made on Jurys Inn, but that all sides would take a look at things in due course.
“The main push, though, is the development of the Leonardo brand in the U.K. and Ireland,” he said. “… I think Fattal was impressed with our footprint in the U.K. and Ireland, (but) Fattal brings with it long-term ambition and significant refurbishment plans.”
Swiss hotels show resiliency to European upheaval
With Brexit, national populism and economic protests present in many European countries, Switzerland provides a respite from the noise, a factor that has not escaped hoteliers, according to Hotel News Now contributor Kerry Medina. Occupancy and average daily rate both are moving in the right direction, but there remain challenges, notably high costs.
Peter Norman, Hyatt’s SVP of acquisitions and development for Europe, Africa and the Middle East, called the country “a mature and stable market (but) to go through the planning process and to secure the zoning for a hospitality development, or any development, is quite rigorous.”
Parisian hotels to receive goodwill following cathedral fire
There has been more bad news for Paris, which in the last few years has seen terrible terrorism incidents. This year its hotels have experienced troubles of a different sort, notably the continued protests by the Gilet Jaunes, or Yellow Jackets. Despite their protests being held only on Saturdays and only in the 8th arrondissement on the Avenue des Champs-Élysées, hotels throughout the French capital have seen year-on-year January 2019 occupancy numbers drop 13.7%, although average daily rate has stayed firm.
The 15 April fire at the Notre-Dame de Paris cathedral—one of Paris’ principal symbols—might, generate worldwide goodwill that could help hotels regain occupancy, hoteliers said.
“The publicity and community of the French people is very positive, and it will provide a positive image of the country,” said Philippe Gauguier, managing partner at In Extenso Tourisme Culture & Hôtellerie, a data partner of STR, (Hotel News Now’s parent company).
Lobby group says hotels hit hard from UK business rates
U.K. hotel and hospitality lobby group UKHospitality said rising business rates is no April Fools’ Day joke, with hotels among the businesses hardest hit by the 1 April increases. The group said U.K. “hotels, hostels and guest houses face annual tax hikes of £27 million ($35.37 million).”
UKHospitality said hoteliers were “increasingly struggling from the effects of a disastrous rates revaluation and an archaic tax system that is shutting down the U.K.’s growth engine and threatening the millions of jobs.”
Deals and developments
- Real estate investment trust Park Hotels & Resorts sold the 152-room Hilton Nuremberg for $17.5 million, which represents a 3.5% capitalization rate on the asset’s 2018 net operating income and 21.2 times 2018 earnings before interest, taxes, depreciation and amortization.
- Patron Capital Partners has bought the 350-room Sheraton Warsaw from a consortium comprising Benson Elliot, Schroders Hotels and Walton Street, which have held the asset since 2015. The property is operated by Marriott International, with oversight management by French owner Algonquin.
- Hyatt will return to Poland with the signing of the 216-room Hyatt Place Krakow, which is scheduled to open in 2021. Hotel Professionals Management Group Sp. z.o.o. will manage the property, which is owned by 3M Hotels Group.
- Thomas Cook will open a Casa Cook hotel, its in-house brand, in Mallorca, Spain. The Hotel Sa Torre will continue to be owned and operated by Hotel Investment Partners, part of the Blackstone Group.
- MHL Consortium has bought the 200-room Powerscourt Hotel in the Irish town of Enniskerry in County Wicklow for a deal thought to be worth €50 million ($55.71 million). The seller is Sugarloaf Investment, who in 2013 bought the hotel, which originally opened in 2006 under the Ritz-Carlton flag.
- Nobu Hospitality will open the Nobu Hotel London Portman Square in spring 2020 with 239 rooms. The owner is London + Regional Hotels, which has partnered with Nobu on Nobu properties in Ibiza and Monte Carlo.
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