Growth Dutch Hotel Market Slowing Down | Horwath HTL Reports
The growth of the Dutch hotel market is slowing down. The HOSTA 2008 report by consulting firm Horwath HTL shows that occupancies and average room rates have increased only slightly. For the coming years, a further slowing of the growth or even a small decline is expected.
Horwath HTL performed the research among 265 three, four and five star hotels in The Netherlands. Occupancies have increased slightly, from 72.1% in 2006 to 72.5% in 2007. This is an increase of 0.4 percentage points; clearly lower than the achieved growth in 2006 (1.9 percentage points) and 2005 (2.5 percentage points).
The average room rates increased by 1.9%, from € 108 to € 110. This increase is considerably lower than the 10% increase that was achieved the year before. As a result, the RevPAR (Revenue per available room) increased by 2.6%, from € 78 to € 80. This is also far lower than the 15% growth achieved in 2006.
Occupancy five star hotels is decreasing
Especially the five star hotels in The Netherlands appear to become victims to the decreased economic growth. The occupancy in the five star hotels has decreased for the first time since 2003, from 77.1% to 74.8%. The occupancies did increase in the three star hotels (from 74.0% to 76.1%) and the four star hotels (from 70.6% to 71.1%). On the other hand, the average room rates did increase in the five star segment (from € 174 to € 178), while they increased only slightly in the three star hotels (from € 81 to € 82) and remained stable in the four star hotels (at € 101).
Growth in Amsterdam is stagnating
The growth in occupancies in the Amsterdam & Schiphol region has stagnated almost completely: the average occupancy of the hotel rooms is 81.4%, only 0.2 percentage points higher than in 2006. The average room rates have increased, although the 4.5% increase here, from € 134 to € 140, is also far lower than the 15.5% increase that was achieved the year before. The current occupancy can be seen as a practical maximum for a city. The room for growth in Amsterdam is limited by a lack of new hotel developments. Earlier calculations by Horwath HTL, commissioned by the municipality of Amsterdam, showed that there is a need for 9,000 new hotel rooms in the city before 2015.
Outside the Amsterdam & Schiphol region, occupancies have increased by 1.5 percentage points, from 65.8% to 67.3%. The average room rate has increased from € 86 to € 90, an increase of 4.7%.
The results show that both the occupancies and the average room rates in the capital are considerably higher than in the rest of The Netherlands, including the other main cities. The cities Rotterdam, The Hague and Utrecht each achieve an occupancy of around 70%, with Utrecht (with 72.1%) still outperforming Rotterdam (69.7%) and The Hague (69.4%). The average room rates in these cities are almost equal, at € 97 to € 99.
Conference guests are increasing
The report by Horwath HTL shows that the segment of individual business and tourist guests has decreased, while the number of conference guests has increased. Still, the business individual guests remain the most important segment, with 39% of the total number of guests, followed by the individual tourists at 29%, conference guests at 17%, tour groups at 9% and other guests at 6%.
Forecasts
Based on the disappointing results, the expectations for 2008 and 2009 have also been adjusted. Last year, it was expected that the occupancy in 2007 would be 73.2% and that it would increase to 75.0% in 2008. Now, the budgets have been adjusted downwards and the forecasts are 73.4% in 2008 and 74.5% in 2009. If the economy remains in a rut, this may have to be adjusted further. The five star hotels in The Netherlands already indicate that they expect a decrease in occupancy in both 2008 and 2009.
HOSTA 2008
The HOSTA 2008 report is a publication by consulting firm Horwath HTL. The report contains the results of the hotel industry in The Netherlands, Belgium and Luxembourg. A total of over 350 three, four and five star hotels in the Benelux have participated in the research.
