Hotel construction pipeline in Europe up 1 per cent YoY

Europe’s total hotel construction pipeline is up 1 per cent year-on-year compared to Q3 2022, a report by Lodging Econometrics has revealed.

The Q3 2023 Hotel Construction Pipeline Trend Report revealed that the total hotel construction pipeline in Europe currently stands at 1,673 projects, representing 249,264 rooms.

By segment, economy projects led the way in relation to growth, with projects growing 5 per cent year-on-year to stand at 157 projects – or 20,042 rooms - at the close of the quarter. Upscale projects in Europe are up 3 per cent YoY and account for 26 per cent of projects at 439 projects, representing 71,178 rooms. The upper upscale chain scale increased 3 per cent by projects YoY, with 284 projects or 46,717 rooms. Luxury projects increased 2 per cent YoY, just ten projects short of the segment’s all-time high, closing the quarter with 139 projects, representing 18,515 rooms.

By country, the UK had the largest number of projects in the pipeline at Q3, with 322 projects, or 44,259 rooms. Germany follows with 201 projects representing 32,889 rooms, then Portugal with 125 projects – or 15,055 rooms - and France with 121 projects representing 13,613 rooms. Turkey reached its all-time high of 114 projects, representing 16,907 rooms and increasing 33 per cent YoY.

European cities with the largest pipelines at the close of the quarter are led by London with 79 projects representing 14,078 rooms and Istanbul, up 20 per cent with 48 projects, accounting for 7,936 rooms. Next was Lisbon, with 37 projects – representing 4,070 rooms - then Dublin with 34 projects and a record 6,492 rooms, followed by Dusseldorf with 30 projects, representing 5,465 rooms.

Brand conversions in Europe were up 15 per cent YoY to stand at 374 projects, representing 49,893 rooms.

In Q3 2023, 241 new hotels, accounting for 32,191 rooms, opened in Europe. At the end of the third quarter of 2023, there are 759 projects/ under construction. Projects scheduled to start construction in the next 12 months stand at 411 projects, representing 63,154 room while projects in early planning stand at 503 projects, representing 71,268 rooms

Why it matters

Looking forward, Lodging Econometrics forecasts that 99 new hotels, representing 13,519 rooms will open by year-end. Analysts expect new hotel openings to continue to ascend in the coming years, with 356 hotels – or 48,888 rooms - scheduled to open in 2024 and climbing even higher to 406 hotels – or 56,127 rooms - in 2025. However, it’s important to remember that adverse market conditions such as financing difficulties and high construction costs may affect these projections.