MICE CENTRAL & EASTERN EUROPE

The European hotel industry has undergone significant transformation over the past decade, driven by changing consumer behavior and economic factors. In this summary, we will explore some of the most notable trends in the European hotel investment market and why the HOTCO 2023 Hotel Investment Conference in Vienna on the 27-28 March 2023 is an opportunity for industry leaders and decision makers to stay ahead of the curve.

The growing popularity of alternative accommodations, such as serviced apartments and vacation rentals has been driven by travelers seeking more space and flexibility, as well as a more authentic local experience. This has proven to be a more resilient business model even during the pandemic years of and has opened up new opportunities for investors within the hospitality asset class.

Extended stay products in particular have huge potential to grow in Europe, with a successful track record in the US, Asia and Australia. Its appeal is driven by a wider customer demand base and resilience during periods of economic volatility.

Extended stay hotel products have also consistently generated higher profit margins underpinned by leaner operating models.

Resorts have also been thrust into the limelight recently, as European investors have pivoted their interest from large corporate hotels catering to mostly international corporate clients to resort locations that are easily accessible and attract a wide range of guest segments. As the leisure market in Europe continues to grow, resort hotels have shown to be a stable investment, especially post-pandemic with increased travel demands. With the majority of resorts in Europe still unbranded, there is a growing demand for investors to bring in a brand as value-add, as it makes securing funding easier.

Recent transactions, such as the following are all hallmarks of this trend:

• Sani Ikos Resorts, a luxury beach resort portfolio in Greece was acquired for €2.3bn (840k Eur/key) by GIC;
• The Cheval Blanc Randheli $ 216million ($4.8million/villa) acquisition by Alpha Dhabi Holding;
• Hyatt’s purchase of Apple Leisure for $2.7bn in 2021 expanded Hyatt’s global brand presence in luxury leisure travel.

Among the resort transactions with a special focus in the Mediterranean area, the primary targets are well-established touristic markets (Spain and Italy), however new and less mature markets, such as Greece, Cyprus and Croatia gained more interest.

The ongoing globalization of the economy has also had a major impact on the European hotel market. As travel and trade continue to grow, so does the demand for hotel accommodations. This has led to increased investment in both new and existing hotels, as well as the redevelopment of historic buildings into boutique hotels. Luxury brands such as Rosewood or Nobu Hotels have entered the CEE region in Vienna and Warsaw respectively, despite the unprecedented hardship the industry had to witness due to the pandemic.

The trend is further underlined by the pipeline of luxury resort projects scheduled to open across Europe in 2023:

• The Son Bunyola Hotel – Mallorca (Sir Richard Branson’s luxury collection of award-winning hotels)
• Mandarin Oriental Costa Navarino – Greece
• One&Only Aesthesis – Athens Riviera
• One&Only Kéa Island – Greece
• Nobu Hotel and Restaurant San Sebastián
• Six Senses Crans-Montana – Switzerland
• Rosewood Schloss Fuschl – Austria

The European hotel industry has undergone significant change over the past decade and continues to evolve. As a result, it is crucial for industry leaders and decision makers to stay informed about the latest trends and developments in the market. The HOTCO 2023 Hotel Investment Conference in Vienna provides an excellent opportunity for attendees to network with leading experts, hear from industry thought leaders and gain valuable insights into the latest trends and best practices in the European hotel industry.