- The Netherlands is the most attractive hotel market in the Benelux with six cities in the top 10 and Amsterdam, The Hague and Rotterdam in the top 3
- Hotel operators expect market recovery in 2024
- Operators still interested in signing leases even though the hotel market has been hit hard
The survey was conducted among 22 international hotel operators in the Benelux who jointly represent 208 hotels with more than 30,000 rooms and 73 hotel concepts with more than 10,700 rooms in the pipeline. The top 10 of most attractive target markets consists of no less than 6 Dutch cities, with Amsterdam, The Hague and Rotterdam in the top 3 respectively. The most important Belgian cities in the ranking are Brussels, Antwerp and Bruges.
From the perspective of the surveyed operators, Amsterdam remains the most attractive target market in the Benelux, other popular cities are The Hague (2nd) and Rotterdam (3rd). Of all the hotel markets in Europe, Amsterdam is one of the markets most affected by the COVID-19 pandemic. Revenue per available room (RevPAR) fell by as much as 79 percent in 2020, driven by the restrictive measures resulting from the global pandemic. Hotel operators are nevertheless positive about a healthy post-COVID market recovery in Amsterdam because the city is less dependent on long-distance markets. About 80 percent of the overnight stays are realized by travelers from European countries and the Netherlands. The majority of hotel operators expect a recovery of the hotel market in Benelux capitals from 2023 with a possible recovery from 2022 in the major regional cities. Smaller regional cities in the Benelux, according to the majority of respondents, will show a recovery from 2022 onwards. These expectations are in line with Oxford Economics' prediction.
No stop on interest in long-term rental agreements
The majority of the respondents (77%) indicate that they still want to conclude long-term leases, which indicates a strong confidence in the recovery of the hotel market. However, they have become more selective in their choice of location. Interest is largely focused on selected markets and prime locations within the Benelux. Less than 5 percent of operators refrain from leases in the current market. Almost half of the respondents indicate that they also want to purchase hotel real estate in the current market. The transaction volume in hotel real estate amounted to approximately EUR 340 million in 2020, a decrease of 87 percent compared to 2019 (EUR 2.5 billion).
A number of developments have been delayed or even canceled completely as a result of the COVID-19 pandemic, which is positive news for operators as it allows for a faster market recovery. Since the outbreak of the pandemic, the Nhow Amsterdam RAI (650 rooms) and the largest European Holiday Inn hotel with 435 rooms opened in Amsterdam. Openings planned in 2021 include the Inntel Hotels Amsterdam Landmark (314 rooms), Radisson Hotel & Suites Amsterdam South (227 rooms) and the latest Accor brand Tribe Amsterdam (192 rooms). As a result of the pandemic, there are several developments that are still at a very early stage, facing delays and financing problems.
Ralph van Polanen Petel, Hotel Real Estate Associate at Cushman & Wakefield: “Amsterdam has long been of the interest of hotel operators and hotel investors and this does not seem to be changing as a result of the COVID-19 pandemic. Our capital and the Benelux in general have enduring values and appeal to very large numbers of domestic and international visitors. The hotel sector therefore expects passenger numbers in the post-COVID era to return to pre-crisis levels. The willingness and desire to travel remains and the Benelux, with Amsterdam on top, remains a very popular destination in this. ”
Marc van Haare Heijmeijer, Senior Capital markets hotel real estate at Cushman & Wakefield: “Despite the difficult situation in the hotel market at the moment, investors and operators remain optimistic about the longer-term outlook. We still see a lot of interest in both real estate investments and long-term operating agreements in the Benelux. We expect the first signs of recovery as early as 2022, although a full recovery will not occur until at least 2023 or 2024.
Download the report for free on this page.