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Sample Euro 2009


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TRI annual publication on the full service hotel sector - European specific

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Sample Euro 2009

  2. 2. WELCOME 02 MARKET BRIEFING 03 AMSTERDAM 03 / BERLIN 04 BIRMINGHAM 05 / BRISTOL 06 GLASGOW 07 / MADRID 08 MANCHESTER 09 / MUNICH 10 NEWCASTLE 11 / PARIS 12 PRAGUE 13 / ROME 14 SOUTHAMPTON 15 THE YEAR IN REVIEW 16 COMPANY PROFILE 17 GLOSSARY 18 For Further Information Directors Jonathan Langston / Mark Dickens / David Bailey / Charles Scudamore Author Ben Walker Research Manager TRI Hospitality Consulting 88 Baker Street London W1U 6TQ HotStats 2009 may not be published, re-produced or quoted in part or in Telephone 020 7486 5191 Fax 020 7486 1189 whole, nor may it be used as a basis for Email any contract, prospectus, agreement or Website other document without prior consent. 01 © TRI HOSPITALITY CONSULTING - HotStats 2009 - EUROPEAN HOTEL INDUSTRY
  3. 3. NEWCASTLE MARKET BRIEFING Departmental Revenue Newcastle is a regional business and financial centre, with a broad economic base encompassing Contribution 2008 manufacturing, IT, commercial services and retail distribution. Current re-development schemes include the former Newcastle & Scottish Brewery site, the Gateshead Quays project and the Other Rentals & Other Newburn Riverside reclamation programme. In October 2008 a 42-bedroomn Hotel du Vin Departments 2.9% 11.6% opened in the former Tyne Tees Steam Shipping Company building. In addition, there are a number of confirmed or probable additions to Newcastle’s branded hotel supply over the Beverage coming years. Construction has started on a 128-unit Staybridge Suites extended-stay hotel, 10.6% scheduled to open in April 2009. In 2010 a 250-bedroom Crowne Plaza is due in the Stephenson Rooms Quarter and a 200-bedroom Jurys Inn beside the Baltic Mill. Northland Properties, which owns 53.9% Food and operates the Sandman hotel chain in Canada, is reportedly due to open a 200-bedroom 21% hotel at the former S&N brewery site, where an Accor hotel is also expected. Monthly Occupancy and Average Room Rate 2008 100% 300 75% 225 Euros 50% 150 25% 75 0% 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Occupancy (%) Average Room Rate Monthly Total TrevPAR Operating Cost PAR and IBFCPAR 350 300 250 200 150 100 50 0 NOV OCT AUG MAR DEC MAY APR JUN Euros JAN Percentage Distribution of FEB SEP JUL Expenses Total Operating Cost PAR IBFCPAR Total Revenue PAR Beverage Cost 2.3% The Newcastle branded hotel market increased average occupancy to 77.2 per cent in 2008. P&M 2.4% On a month-by-month basis, occupancy reached its highest level of 86 per cent in July, driven by Sales & Marketing 3.6% an extended run of Kylie Minogue concerts at Metro Radio Arena. Both average room rate and Energy Costs 4.2% IBFC per available room peaked in October thanks to two international medical conferences and Admin & General 6.5% the Great North Run. Over the full year rooms RevPAR was up by 1.5 per cent, but higher staff, Food Cost food and utility costs impacted profitability, causing daily IBFC to fall by 4.6 per cent to €39.12 6.3% per available room. Other Department COS 1.2% Departmental Expenses 9.4% Payroll & Related Expenses 28.6% Gross Operating Profit 35.5% Total 100.0% Newcastle Performance Indicators 2008 vs 2007 2008 2007 Variance DOP Percentage 77.2 Rooms Occupancy % 76.2 1.1 pts 76.85 Average Room Rate (€) 76.78 0.1% 59.36 Rooms RevPAR (€) 58.49 1.5% Rooms 71.0% 40.92 F&B RevPAR (€) 41.41 -1.2% F&B 40.6% 110.19 TREVPAR (€) 109.43 0.7% Other Departments 27.6% 39.12 IBFCPAR (€) 41.01 -4.6% Rentals & Other 72.9% 28.6 Payroll Percentage of Total Revenue % 28.6 -0.1 pts *Total 58.7% 35.5 IBFC Percentage of Total Revenue % 37.5 -2.0 pts *Total Departmental Profit as a % of Total Revenue 11 © TRI HOSPITALITY CONSULTING - HotStats 2009 - EUROPEAN HOTEL INDUSTRY
  4. 4. EUROPE HOTEL TRANSACTIONS THE YEAR IN REVIEW Following several years of consecutive growth, 2008 proved to be a challenging year for the European real estate market as slowing economic output and illiquid debt markets started to have their impact. Hotel transaction volumes across Europe fell by 64 per cent to €7.7 billion during the year. This compares to a 57 per cent fall in office investment volumes in 2008. Unlike what had been the norm in recent years, 2008 hotel investment volume was made up mainly of single asset transactions, reaching €4.2 billion, whilst portfolio transactions achieved €3.5 billion. The reduction in hotel investment activity was mainly due to fewer portfolio transactions as illiquidity in the debt markets made it difficult to raise high levels of finance. The majority of portfolio transactions recorded in 2008 were made up of two or three properties, whilst large corporate transactions which were prevalent in recent years no longer appeared. Some of the largest single asset sales completed during the year comprised development sales in London, including the Metropole building, Hotel Silken and Café Royal in London. The Metropole Building was sold by the Crown Estate on a long lease for €180 million to a consortium comprising International Hotel Investments, the Lybian Foreign Investment Company and Istithmar Hotels, who will restore the historic building and open it as a Corinthia hotel. The largest fall in investment volume was reported for the UK, where investment volume decreased by almost 73 per cent year-on-year. Results on the continent were slightly better but nevertheless, the UK remained the leading country in Europe based on transacted volume, accounting for 27 per cent of the total market volume. Germany also saw a significant proportion of hotel investment activity and maintained its second place, with around 12.5 per cent market share. The property market in Spain has been one of the most adversely affected in Europe. With property prices plummeting across the country, investors were eager to snap up cheap deals in this notoriously illiquid market. Consequently Spain was the only European country to experience growth in hotel investment volume, reporting a total disclosed sum of €713 million compared to €383 million in 2007. Changing debt markets are causing a shift in the most active buyer type as aggressive highly leveraged buyers, such as the private equity groups, reduce their investment activity and give way to other categories of buyers which had been forced out of the market during the last few years. Overall, hotel operators were the dominant buyer type in 2008. Although the group’s actual invested volume fell compared to 2007, their market share as a buyer grew substantially to 22 per cent as activity from other investors fell to a greater extent. As investors became more risk averse due to the financial turmoil, domestic capital became once again the dominant source of capital, representing 33 per cent of the total volume in 2008. The market also saw an incredible 70 per cent year-on-year uplift in Middle Eastern capital which gave it a 27.2 per cent market share compared to just 5.7 per cent in 2007. As the difficulties in the financial markets continue and investor sentiment worsens, it is expected that 2009 will be another challenging year. Investment activity will be mainly led by lowly leveraged, long term players looking for opportunistic acquisitions which would not be available in more buoyant market conditions. Jones Lang La Salle Hotels Top hotel transactions in Europe in 2008 Price per Property name Location Closing date Price €m Rooms key (€) Buyer Seller Northern European Properties portfolio (39 hotels) Scandinavia Mar-08 664 - - CapMan Northern European Properties Jurys Inn Portfolio (50% Stake) Ireland, UK Aug-08 465 1874 248,000 Oman Investment Fund Quinlan Private Thistle Portfolio (2 hotels) London Mar-08 320 638 502,000 Abu Dhabi royal family CPC Group Meridien Portfolio (2 hotels) Portugal, Algarve Jan-08 143 350 409,000 JJW Hotels & Resorts Starman Starwood Portfolio (3 hotels)* Italy Jan-08 130 419 312,000 EST Capital Starwood Hotels & Resorts Metropole Building London Feb-08 143 283 504,000 International Hotel Investments Crown Estate Libyan Foreign Investment Company Istithmar Hotel Continental Belgrade Mar-08 118 415 285,000 Delta Real Estate (NGBP Properties) International CG (Henex) Hotel Silken London Feb-08 111 170 652,000 Losan Hotels World Grupo Urvasco Prince de Galles Paris Sep-08 112 168 669,000 Mussalam Family Caisse Autonome nationale de la sécurité sociale des mines Crowne Plaza London - The City* London Jul-08 84 203 413,000 ARG Hotels Limited Gruppo Statuto * Vendor advised by Jones Lang LaSalle Hotels Source: Jones Lang LaSalle Hotels 16 © TRI HOSPITALITY CONSULTING - HotStats 2009 - EUROPEAN HOTEL INDUSTRY