Despite Looming Clouds, Optimism Reigns in European Hotel Industry
Recession in the UK Isn't Enough To Dampen Hoteliers' Hopes Across the Continent
War on one side of the continent and a historic recession looming on the other aren't enough to dampen optimism for the European hotel industry.
War on one side of the continent and a historic recession looming on the other aren't enough to dampen optimism for the European hotel industry.
Hoteliers in the region say travel demand is likely to remain broadly resilient. The midscale segment in particular is poised for success.
Speaking at Alvarez & Marsal’s European Hospitality Investment Conference, Willemijn Geels, vice president of development for Europe at IHG Hotels & Resorts, said 35% of the company's signings are in the midscale segment.
“There is big demand for midscale [hotels] with families, such as for Holiday Inn, Voco and extended stay. These brands are very resilient, and they have proven again that it is an interesting model both from operational and investment viewpoints,” she said.
Costs are increasing in Europe faster than other global regions, but that hasn't been enough to slow down investor interest.
J. Pedro Petiz, managing director of London-based Avington Financial, said buyer and seller expectations are starting to align.
“The bid-ask spread was the big issue two months ago, but things have changed in terms of monetary policy,” he said.
Paris-based Accor has been reporting "gorgeous" operating results through 2022, with Chief Financial Officer and Deputy CEO Jean-Jacques Morin pointing to high demand and pricing power as reasons his company has surpassed pre-pandemic performance.