Post on 02-Jun-2020
spotlight Spotlight | HotelsThe Netherlands
Savills World Researchsavills.nl/research
Q1 2018
Dutch hotels attract more than just tourists
This also can be seen in the hotel market which, in 2017, benefi tted from 28.5 million hotel guests - a new record and up 10% compared to 2016. The overnight stays increased by almost 9%, a hotel guest stays for on average 1.7 nights in Dutch hotels. Nearly half of the guests came from abroad, with the largest volume of guests
coming from other European countries, especially Germany, the UK and Belgium.These numbers are forecasted to grow even more due to the economic upswing, but also due to the fast expanding middle class in countries such as China, India and Brazil. For this group, travelling becomes more and more within reach.
Amsterdam is by far the most popular destination in the Netherlands, accounting for almost half of the foreign visitors. This is partly due to the cultural amenities the city has to off er, such as the world-famous canals and museums, and the appeal to business travellers thanks to large companies who
have their headquarters in Amsterdam such as Philips, Heineken and AkzoNobel and tech giants Uber and Amazon. Furthermore, the European Medicine Agency (EMA) recently announced they will relocate from London to Amsterdam in 2019. This institute attracts approximately 30,000 visitors a year and will therefore have a positive impact on the hotel market in Amsterdam.
Rotterdam is the second most popular destination within the Netherlands, while smaller cities such as Utrecht and Maastricht saw the highest proportional increase in hotel guests last year with +36% and +26% year-on-year growth respectively.
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Spotlight | Hotels | The Netherlands
Economy and Tourism
introductionSupply, Room Rates, Occupancy and RevPARs
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Savills World Research | Q1 2018
At the start of 2017 there were about 3,625 hotels (+1.1% compared to 2016), with a total of approximately 123,500 bedrooms (+2.1%) providing 269,000 beds (+3.0%).
These numbers also indicate that new developments are becoming larger on the whole. This growth of facilities is lower than the growth of tourists and overnight stays which resulted in higher room rates and occupancy, as shown in the graph below.
In Amsterdam, room rates and the revenue per available room (RevPAR) are the highest and are forecasted to increase further to €139 and €110 this year respectively. This keeps Amsterdam in the top 10 of cities in Europe with the highest average room rates.
Not only is the number of hotel guests increasing, the number of hotels in the Netherlands is increasing as well.
Tourism in the Netherlands is at an all-time high.
1 Source: CBS 2 Source: PWC, Standing out from the crowd - European cities hotel forecast for 2017 and 2018
The Netherlands ranks as the fi fth largest Eurozone economy with one of the lowest unemployment rates and a GDP capita of above € 41,000.
With its highly stable economy, the Netherlands is one of Europe’s most sought-after investment markets.
GRAPH: OVERNIGHT STAYS (SOURCE: CBS; SAVILLS FORECAST)
The number of hotel visitors and overnight stays in the Netherlands is increasing to new records
Room Rates
increasing
InvestmentVolume
record
Occupancy
higher
Yields
compressing
Supply
new developments
OvernightStays
contracting
60.000.000
50.000.000
40.000.000
30.000.000
20.000.000
10.000.000
02012 2013 2014 2015 2016 2017 2018
DOMESTIC OVERNIGHT STAYS
AVERAGE ROOM RATE
NUMBER OF ROOMS
INTERNATIONAL OVERNIGHT STAYS
RevPAR
NUMBER OF BEDS
HOTEL GUESTS
ROOM OCCUPANCY
NUMBER OF ACCOMMODATIONS
GRAPH: HOTEL SUPPLY KEEPS INCREASING(SOURCE: CBS, FORECAST BY SAVILLS BASED ON DEVELOPMENTS)
GRAPH: LARGE DEMAND CAUSES RISING ROOM RATES (SOURCE: HOSTA 2017)
€120
300.000
350.000
€100
250.000
€80
200.000
€60
150.000
€40
100.000
€20
50.000
0
0
56%
3.400
62%
3.550
68%
3.700
58%
3.450
64%
3.600
70%
3.750
74%
60%
3.500
66%
3.650
72%
76%
2012
2015
2013
2016
2014
2017
2015
2018
2016
2019 2020 2021
2009
2012
2011
2014
2010
2013
AVERAGE ROOM RATEAVERAGE ROOM RATE
NUMBER OF ROOMSNUMBER OF ROOMS
RevPARRevPAR
NUMBER OF BEDSNUMBER OF BEDS
ROOM OCCUPANCYROOM OCCUPANCY
NUMBER OF ACCOMMODATIONSNUMBER OF ACCOMMODATIONS
GRAPH: HOTEL SUPPLY KEEPS INCREASING GRAPH: HOTEL SUPPLY KEEPS INCREASING(SOURCE: CBS, FORECAST BY SAVILLS BASED ON DEVELOPMENTS)(SOURCE: CBS, FORECAST BY SAVILLS BASED ON DEVELOPMENTS)
GRAPH: LARGE DEMAND CAUSES RISING ROOM RATES (SOURCE: HOSTA 2017) GRAPH: LARGE DEMAND CAUSES RISING ROOM RATES (SOURCE: HOSTA 2017)
€120€120
300.000300.000
350.000350.000
€100€100
250.000250.000
€80€80
200.000200.000
€60€60
150.000150.000
€40€40
100.000100.000
€20€20
50.00050.000
00
00
56%56%
3.4003.400
62%62%
3.5503.550
68%68%
3.7003.700
58%58%
3.4503.450
64%64%
3.6003.600
70%70%
3.7503.750
74%74%
60%60%
3.5003.500
66%66%
3.6503.650
72%72%
76%76%
20122012
20152015
20132013
20162016
20142014
20172017
20152015
20182018
20162016
20192019 20202020 20212021
20092009
20122012
20112011
20142014
20102010
20132013
Most developments are taking place in the Amsterdam area, where approximately 4,000 rooms will enter the market in 2018, representing an increase of 13% of total supply.
In the period 2019-2020 another 3,000 rooms are expected to be added, which will bring the total supply of hotel rooms in Amsterdam to almost 40,000. The number of new hotel developments thereafter
will be less substantial, since the municipality introduced a ‘hotel stop’ in January 2017.
This means that as of that date, no new permits for hotel developments will be issued in certain areas, including the largest part of the city centre. In other areas such as the South Axis, the West Axis and parts of East and Southeast, developments are allowed if they meet certain criteria and add something “special” to the area, like an innovative concept.
In addition to the developments in Amsterdam, Savills has identifi ed more than 1,400 hotel rooms across the country which will be entering the market by 2020. In the tables above the largest hotel developments in Amsterdam and the rest of the country are listed. Quite noticeable is that almost all developments are for upscale, 4-stars hotels.
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Spotlight | Hotels | The Netherlands
Developments
In order to keep up with this growing demand for hotel accommodation an increase in developments has been recorded.
Hotel Investments
4
Savills World Research | Q1 2018
Due to the search for yields, and the diversifi cation possibilities, investors without a history in the hotel sector are now looking at investment opportunities as well.
These are important reasons why hotel investments reached a record in 2017 with about €1.8bn invested; a remarkable increase of 200% compared to the previous year. Almost three quarters of the total investment took place in Amsterdam, underlining investors belief that this city will remain a key tourist and business destination.
It is noteworthy that one third of all investments came from German investors while the share of Dutch investors was relatively low. One of the reasons for this is that Dutch investors are more used to making investments based on the property value instead of cash fl ow, which gave foreign investors a head start in recent years. Also noteworthy is the increasing activity of investors from Asia, and especially China.
About a quarter of 2017 investment volume was from Asian investors, including the largest deal in 2017, the purchase of DoubleTree by Hilton Amsterdam Central Station for €350m by Chinese investor Anbang Group. This increase in Asian investments is also being seen in other markets such as the UK. The table below details other large hotel investments in the Netherlands.
Traditionally only specialised hotel investors were active in the sector.
AMSTERDAM CITY HARBOUR HOTEL
CROWN PLAZA + HAMPTOM BY HILTON UTRECHT
LEONARDO AMSTEL HOTEL
VAN DER VALK APELDOORN
RENAISSANCE HOTEL AMSTERDAM SCHIPHOL
VEN ROTTERDAM
MARITIM HOTEL
VAN DER VALK EXCLUSIER ZUIDAS
SAX BUILDING ROTTERDAM
VEN - PARK INN BY RADISSO
INDIGO ROYAL PALACE THE HAGUE
POSTILION
HOLIDAY INN EINDHOVEN
HOLIDAY INN EXPRESS
AMRATH UTRECHT
LANDMARK HOTEL OOSTENBURG
OLYMPIC HOTEL
PLAZA HOTEL ALMERE
QO CROWNE PLAZA
MOVENPICK HOTEL DEN HAAG THE HAGUE
NHOW HOTEL
VAN DER VALK DEN HOORN
MELIA
245
328
490
151
250
N/A
579
240
150
476
63
252
180
439
250
300
309
158
288
72
650
140
328
UPSCALE CLASS
UPSCALE CLASS / MIDSSCALE CLASS
UPSCALE CLASS
UPPER MIDSCALE CLASS
UPPER MIDSCALE CLASS
LUXURY CLASS
UPSCALE CLASS
UPPER UPSCALE CLASS
N/A
UPSCALE CLASS
UPSCALE CLASS
UPPER MIDSCALE CLASS
UPSCALE CLASS
MIDSCALE CLASS
UPSCALE CLASS
UPSCALE CLASS
UPSCALE CLASS
UPSCALE CLASS
UPSCALE CLASS
UPPER MIDSCALE CLASS
UPSCALE CLASS
UPPER MIDSCALE CLASS
UPSCALE CLASS
2018
2018
2018
2018
2018
N/A
2020
2020
2022
2018
2018
2018
2019
2019
2020
2020
2018
2018
2018
2019
2019
2020
2020
HOTEL
HOTEL CITY
NO. OF ROOMS
NO. OF ROOMS
CLASS
CLASS
OPENING
OPENING
TABLE: LARGEST HOTEL DEVELOPMENTS IN AMSTERDAM
MAP: LARGEST HOTEL DEVELOPMENTS IN AMSTERDAM
GRAPH: HOTEL INVESTMENT VOLUME WENT SKY-HIGH GRAPH: CHINESE AND GERMAN INVESTORS WERE THE MOST ACTIVE PLAYERS ON THE DUTCH HOTEL MARKET IN 2017
UNITED STATES OF AMERICAUNITED KINGDOMSINGAPOREFRANCE
CHINAGERMANY
THE NETHERLANDS
TABLE: MAJOR HOTEL DEVELOPMENTS IN THE REST OF THE NETHERLANDS
DOUBLETREE BY HILTON AMSTERDAM CENTRAAL STATION
AMSTERDAM
NH BARBIZON PALACE AMSTERDAM
HYATT PLACE AMSTERDAM AIRPORT HOTEL
HOOFDDORP
HOTEL NH AMSTERDAM ZUID AMSTERDAM
HOTEL W AMSTERDAM (INCL. THE DUCHESS)
AMSTERDAM
NHOW HOTEL AMSTERDAM
HILTON ROTTERDAM
QUEEN BILDERBERG PORTFOLIO
CONGRES HOTEL OVERHOEKS AMSTERDAM
OLYMPIC HOTEL
CROWNE PLAZA & HAMPTON BY HILTON
AMSTERDAM
UTRECHT
557
268
330
213
238
650
254
1,633
579
309
328
UPSCALE CLASS
UPPER UPSCALE CLASS
UPSCALE CLASS
UPSCALE CLASS
LUXURY CLASS
UPSCALE CLASS
UPPER UPSCALE CLASS
UPSCALE CLASS
UPSCALE CLASS
UPPER MIDSCALE CLASS
UPSCALE CLASS / MIDSCALE CLASS
€350M ANBANG GROUP BLACKSTONE
€155.5M DEKA NH HOTELS
€53.8M AVIGNON CAPITALIEN HILLGATE INVESTMENTS
€45M AVIGNON CAPITAL RJB
€260M DEKA STAG EUROPE
€150M AXA IM COD/BEING DEVELOPMENT
€50M (2018) FIRST SPONSOR GROUP N/A
€205M FIRST SPONSOR GROUP GOLDMAN SACHS/KKR
€125M IES IMMOBILIEN ABN AMRO BANK
€46M
€26.4M
ALEX CHANG, KUNSHANG AND WENZHOU TONYONG LOCKS
FIRST SPONSOR GROUP
CHRIS LUKEN
KLEPIERRE
HOTEL CITY ROOMS CLASS PURCHASE PRICE PURCHASER VENDOR
TABLE: LARGEST HOTEL INVESTMENTS 2017
20102010 20132013 2016201620112011
AVERAGE
20142014 2017201720122012 20152015
0
€200M
€800M
€400M
€1000M
€1400M
€1800M
€600M
€1200M
€1600M
€2000M
· VEN - P
ARK INN BY RADISSO
· HOLID
AY IN
N EXPRESS
· LANDMARK HOTE
L OOSTE
NBURG
· AMSTE
RDAM CITY HARBOUR HOTE
L
· MARITI
M HOTEL
· OLY
MPIC HOTEL
· NHOW HOTEL
· VAN DER VA
LK EXCLU
SIEF ZUIDAS
· QO CROWNE PLA
ZA
LEONARDO AMSTE
L HOTE
L · · POSTILLIO
N
· MELIÃ
· RENAISSANCE HOTEL A
MSTERDAM SCHIPHOL
There is a universal expansion in travel accommodation types available to consumers, driven largely by the tastes and demand of ‘millennials’. An example is the increase in boutique hotels (like Generator and Vondel Hotels).
Another trend is blurring hospitality with other uses, allowing operators to better monetise communal space and add vibrancy that can add to the guest experience. Short stay apartments (like Zoku and Element) are an example of blurring with residential
use, while The Student Hotel is a great example of the blurring of lines between the hotel and student housing sector.
Online marketplaces for lodging like Airbnb are already familiar; with Airbnb boasting a market share of approximately 11% of all overnight stays in Amsterdam and around 7% in other cities like The Hague and Rotterdam. In order to manage nuisance and liveability in some areas, municipalities have put restrictions on Airbnb. As of 2019, house owners in Amsterdam are allowed to rent their house for a maximum of 30 days (60 days currently).
This is already the case in Amstelveen, a neighbouring municipality of Amsterdam. In Rotterdam and Utrecht there are initiatives to introduce a maximum of 60 days. This, of course, is positive for the hotel sector as well.
Due to the fact that the hotel investment market is so specialised and perceived to be more risky than commercial investments, typically only investors with extensive knowledge of the sector are active in the market.
Notwithstanding that, we are increasingly seeing new investors enter the market seeking to diversify the product and income mix within their portfolio. And, whilst when compared to bond yields the gross initial
yield of hotels is high, this gap is decreasing as indicated in the graph above. Because demand for hotel investments is higher than current supply, gross initial yields for prime locations like the city centre of Amsterdam fell considerably over the past 12 months and currently stand at 4.25%.
For national investors this is quite a sharp yield compared to other asset classes. However, international investors who are comparing yields across several global
markets, are more accepting of these ‘low’ yields. This is one of the principle reasons why hotel investment has been dominated by international investors over recent years.
Due to the low supply of hotel investment opportunities in prime Amsterdam locations, investors are increasingly looking towards other markets causing yield compression in these locations as well. Prime gross yields in Utrecht for example have sharpened to 6.0% from 8.0% in 2014.
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Spotlight | Hotels | The Netherlands
Yields Outlook
6
Savills World Research | Q1 2018
Due to the growing number of visitors and the limited growth of hotel developments, Savills expects that room occupancy and rates will keep increasing in the years to come. This is positive for hotel turnover, which makes the hotel sector very appealing.
In the search for yield we see a growing interest in the hotel market by investors who may never have invested in the hotel market previously. Due to this growing demand we expect that yields will compress even further. This in turn will make the option of sale-and-lease-back increasingly interesting for hotel operators who own the property. For these reasons we expect a substantial investment volume in 2018, again dominated by international investors.
TrendsHotel market
“The increase in the number of hotel rooms in Amsterdam is considerable, however the increase in the number of tourists is increasing even faster, which strengthens hotel investment fundamentals.”
- Bas Wilberts
3 Tips for Investors
1. Value hotels on cash fl ow and operator, not on the value of the bricks-and-mortar
2. Food & bevarages deserve a separate assessment
3. Hotels on secondary locations are becoming more stable due to the spread of tourism. This off ers opportunities.
GRAPH: THE YIELD GAP IS DECREASING
PRIME HOTEL
YIELD GAP
BOND YIELDS NL (10YR)
2013 2014 2015 2016 2017 Q40%
1%
2%
3%
4%
5%
5%
6%
6%
7%
Spotlight | Hotels | The Netherlands
keyfi ndingscall us at +31 (0) 20 301 2000 Property starts with people
Bas WilbertsBas WilbertsHead of Alternative Head of Alternative InvestmentsInvestmentsb.wilberts@savills.nlb.wilberts@savills.nl+31 (0) 20 301 2011+31 (0) 20 301 2011
Marco PeetsmaMarco PeetsmaAssociateAssociateAlternative InvestmentsAlternative Investmentsm.peetsma@savills.nlm.peetsma@savills.nl+31 (0) 20 301 2034+31 (0) 20 301 2034
Robert stapletonRobert stapletonDirector Director Savills HotelsSavills Hotelsrstapleton@savills.comrstapleton@savills.com+44 (0) 20 7409 8029+44 (0) 20 7409 8029
Adriaan TervoortAdriaan TervoortDirectorDirectorSavills ValuationsSavills Valuationsa.tervoort@savills.nla.tervoort@savills.nl+31 (0) 20 301 2020+31 (0) 20 301 2020
Jordy KleemansJordy KleemansHead of Research & Head of Research & ConsultancyConsultancyjordy.kleemans@savills.nljordy.kleemans@savills.nl+31 (0) 20 301 2000+31 (0) 20 301 2000
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Focus on AmsterdamMost developments are taking place in the Amsterdam area, where approximately 4,000 rooms will enter the market in 2018. In the period 2019-2020 another 3,000 rooms are expected to be added.
Large volume developmentsNew hotel developments are becoming larger, which makes these developments interesting for investors who are used to large investment volumes.
Record high investmentsHotel investments reached a record in 2017 with about €1.8bn invested; a remarkable increase of 200% compared to the previous year.
Foreign interestGerman and Asian investors are most active on the Dutch hotel market. Only a small share of the investment volume was from Dutch investors.
Expanding portfoliosNew investors are entering the market, seeking to diversify the product and income mix within their portfolio.
Interesting YieldGross initial yield for prime locations fell considerably over the past 12 months and currently stand at 4.25%