Terrorism is the biggest threat to the European hotel market in 2017, dwarfing concerns over US President Donald Trump and Brexit, according to industry leaders.
Addleshaw Goddard's annual hotel seminar, which surveyed more than 70 senior representatives from the hotel industry, included a panel of specialists to debate the hotel sector outlook for 2017.
London has lots to contend with in 2017, with a full pipeline of rooms due to come to market, continuing security concerns and of course the impact of Brexit. There were, however, some positive trends on the horizon.
James Salford, co-head of Addleshaw Goddard's hotel team commented: "It was encouraging to hear that almost two thirds of those polled at the seminar thought hotel development in London had definitely not or probably not reached saturation point. This is certainly great news for our practice and also reflective of what we are seeing in terms of our deal flow activity."
The seminar was chaired by Patrick Whyte, UK Editor at Skift, and included Philip Lassman from Intercontinental Hotels Group, Asli Kutlucan from Cycas Hospitality, Giles Furze from Savills UK, Jon Colley from International Hotel Properties and Tim Helliwell from Barclays Bank.
With the seminar poll revealing that 36% of industry specialists expect the budget sector to perform best in 2017 (when compared to luxury, upscale, upper midscale, and midscale), Lucy Sturrock, co-head of Addleshaw Goddard's hotel team said: "This certainly rings true when we think about our long term client Travelodge's performance over the last couple of years."
Scotland is attracting lots of interest, with 20% of those attending the seminar identifying Edinburgh as the most likely top performer for 2017 in terms of RevPAR growth when compared to other major UK cities.
Other results revealed by the seminar survey include:
- 50% of industry specialists believe that we are definitely or quite possible about to enter a two tier market with key foreign tourist destinations benefiting from a weak pound but hotels that rely on the domestic market will suffer from constrained consumer spending.
- 66% of industry specialists think that London would definitely or quite possible be more resilient to a terrorist attack than Paris and Brussels have been.
- 7% of industry specialists thought that there are too many non-hotel specialised lenders in the market.
- Given the increasing trend for owners to appoint independent hotel operators alongside a branded franchise agreement, 32% of industry specialists think that most operators do not trust the brands to run hotels anymore.
- 41% of industry specialists think that convenience is the top priority for guests, when compared to service, comfort, food and beverage options and in room technology.
Notes to editors
Addleshaw Goddard's hotel & leisure team provides commercial and strategic expertise on all matters relating to the development, operation, restructuring, intellectual property, tax, financing, acquisition and disposal of hotels throughout EMEA and Asia Pacific.