UK leads Europe in hotel construction pipeline

It's becoming more expensive to build new hotels, but it doesn't mean that Europe is letting up in new hotel openings. That's according to the latest Hotel Construction Pipeline Trend Report from data firm Lodging Econometrics, which reports that at the close of the second quarter of 2022, Europe continues to show steady growth in new hotel openings, with 188 new hotels opening totaling 28,350 rooms in the first half of the year.

The region is forecast to open another 259 hotels with 36,548 rooms in the next two quarters, for a 2022 year-end forecast total of 447 new hotels with 64,898 rooms. The LE forecast for new hotel openings for the next couple of years expects a total of 421 new hotels with 62,281 rooms to open by the end of 2023 and 419 new hotels with 64,016 rooms are forecast to open in 2024.

At Q2 2022, Europe’s hotel construction pipeline stands at 1,706 projects and 265,818 rooms. There are 817 hotels and 131,772 rooms currently under construction in Europe’s hotel construction pipeline and 413 hotels and 60,397 rooms planning to start construction in the next 12 months. Projects and rooms in the early planning stage are up 8 percent and 4 percent year over year, respectively, with 476 hotels and 73,649 rooms.

Following nearly two years of project and timeline delays, continued pandemic management and containment, the ongoing Russia-Ukraine war, labor shortages and high inflation, Europe’s hotel construction pipeline is slowly improving. During the first and second quarters, many countries throughout the region reopened borders to international travel and have seen increasing numbers of leisure and business travelers. While the region still faces many challenges on its way to full recovery, this pent-up demand for travel has and will continue to play a major role.

"We continue to see investment in new properties particularly select service brands. These properties are extremely efficient both in development and operations after they open. Suburban development for hotels is spreading throughout the region," said Bruce Ford, SVP at Lodging Econometrics.

Top Markets

The countries leading Europe’s construction pipeline with the most project and room counts at Q2 are the United Kingdom with 309 hotels and 46,296 rooms, Germany with 258 hotels and 44,692 rooms, France with 152 hotels and 17,338 rooms, Portugal with 123 hotels and 14,811 rooms and Poland with 85 hotels and 12,205 rooms. These five countries account for 54 percent of the projects and 51 percent of the rooms in Europe’s total construction pipeline at Q2 2022.

The cities in Europe with the largest pipelines are London, United Kingdom, with 80 hotels and 13,683 rooms, and Dusseldorf, Germany, with 46 hotels and 8,492 rooms. Next is Paris, France, with 35 hotels and 5,540 rooms, then Lisbon, Portugal, with 34 hotels and 3,850 rooms, followed by Istanbul, Turkey, with 32 hotels and 6,598 rooms.

Top Brands

Franchise companies with the largest construction pipelines at the end of the second quarter are led by Accor with 262 hotels and 35,694 rooms and Marriott International with 201 hotels and 31,560 rooms. Next is Hilton with 192 hotels and 28,550 rooms, InterContinental Hotels Group with 151 hotels and 20,644 rooms, and then Radisson Hotel Group with 45 hotels and 8,266 rooms. These five global franchise companies at Q2 account for 50 percent of projects and 47 percent of rooms in Europe’s total pipeline.

The largest brands for each of these top companies are Accor’s Ibis brands with 92 hotels and 10,998 rooms; Marriott’s Moxy brand with 51 hotels and 8,769 rooms; Hilton’s Hampton by Hilton brands with 69 hotels and 10,583 rooms; IHG’s Holiday Inn Express with 60 hotels and 8,723 rooms; and Radisson’s Blu brand with 13 hotels and 2,199 rooms.