EMEA HOTELS

MONI TOR

AUGUST 2010
I SSUE 6
EMEA HOTELS MONITOR
AUGUST 2010
Introduction
In Issue 5, we speculated that the volume of distressed
sales in 2009 could have been the beginning of something
big, but this initial ripple has not resulted in a tsunami
of transactions. If anything the system has become even
more blocked as banks adopt the rolling loan gathers
no loss approach. Hotel markets across the region are
continuing to perform well and construction costs are
falling in most countries.
In this issue we also present the frst in a series of
tabulations - average room sizes by category as stipulated
by the big brands.

Cushman & Wakefeld Hospitality employs a team of
dedicated professionals globally, covering all disciplines.
From the worlds largest wholly-owned offces platform,
the team can serve you and your business wherever you
are based and wherever you want to go.
EC Harris is a leading international Built Asset
Consultancy generating positive outcomes for its clients
from their investment and expenditure in built assets.
EC Harris has an international team of Hotel experts
who act as trusted advisors to its clients in planning
and executing strategies that optimise the construction,
operation, use and ownership of built assets.
STR Global provides clients with access to hotel research
with regular and custom reports covering over 40,000
hotels globally. They provide a single source of global
hotel performance data, offering concise, accurate and
thorough industry research worldwide and they track a
variety of Proftability, Pipeline and Census data covering
all aspects of the industry.
1
Performance Trends
After a turbulent 2009, the frst half of 2010 saw a
recovery for most hotel markets. Occupancy levels
improved on weak performances last year, whilst ADR
remained under pressure. Middle Eastern markets
lagged behind their European and African counterparts
as the region went later into the downturn in early
2009.
Cape Town was the star performer in ADR terms.
The FIFA World Cup, which took place 11 June to 11
July 2010, boosted the YTD rates. In June 2010, Cape
Towns ADR grew 117% compared to June 2009 and
18% YTD in local currency. Interestingly, occupancy
levels for the month of June remained subdued at 58%,
just 7.9 percentage points higher than last year.
Oslos room supply increased (+9%) in the frst half of
this year, which slowed down the occupancy recovery.
ADR in local currency just fnished the YTD on a
virtual par with the frst six months of 2009 (-0.7%)
London achieved the highest YTD occupancy of the
markets reviewed here. The combination of strong
demand (being infuenced by the favourable Euro/USD
to Pound exchange rates) and its continued appeal as
a leisure and business destination enabled hoteliers
to start rebuilding their ADR (YTD +6.4% in local
currency).
2010 2009 Growth
City ADR Occ RevPAR ADR Occ RevPAR ADR Occ RevPAR
% % Abs () % Abs % % Abs () %
Amsterdam 123.34 70.6 87.11 123.32 65.9 81.23 0.01 0.0 4.8 7.2 5.88 7.2
Berlin 88.30 65.4 57.75 81.79 62.9 51.43 6.51 8.0 2.5 4.0 6.32 12.3
Budapest 62.60 52.6 32.92 70.53 48.2 34.02 -7.92 -11.2 4.3 9.0 -1.10 -3.2
Cairo 98.39 65.4 64.32 93.97 65.4 61.47 4.42 4.7 0.0 0.0 2.85 4.6
Cape Town 125.44 57.6 72.23 86.63 60.2 52.12 38.81 44.8 -2.6 -4.3 20.11 38.6
Copenhagen 95.77 57.8 55.35 112.06 56.1 62.88 -16.30 -14.5 1.7 3.0 -7.53 -12.0
Dubai 172.20 73.1 125.91 188.63 69.0 130.07 -16.43 -8.7 4.1 5.9 -4.16 -3.2
Dublin 79.01 62.5 49.36 87.37 59.5 52.01 -8.36 -9.6 2.9 4.9 -2.65 -5.1
Edinburgh 86.21 72.7 62.67 83.37 71.3 59.45 2.83 3.4 1.4 2.0 3.23 5.4
Helsinki 96.32 63.0 60.65 104.77 57.6 60.31 -8.46 -8.1 5.4 9.4 0.34 0.6
London 139.12 79.2 110.15 126.61 77.1 97.63 12.51 9.9 2.1 2.7 12.53 12.8
Madrid 92.67 64.8 60.02 95.30 57.1 54.42 -2.63 -2.8 7.7 13.4 5.60 10.3
Milan 136.62 61.3 83.72 146.98 57.2 84.05 -10.36 -7.0 4.1 7.2 -0.33 -0.4
Moscow 147.28 59.2 87.14 154.05 53.2 82.01 -6.77 -4.4 5.9 11.1 5.13 6.3
Muscat 176.82 57.8 102.20 214.65 57.5 123.41 -37.83 -17.6 0.3 0.5 -21.21 -17.2
Oslo 122.19 59.0 72.13 110.42 60.7 67.05 11.77 10.7 -1.7 -2.8 5.08 7.6
Paris 171.57 74.5 127.77 165.51 71.9 118.98 6.06 3.7 2.6 3.6 8.79 7.4
Prague 73.94 55.4 40.99 83.33 51.1 42.58 -9.39 -11.3 4.3 8.5 -1.59 -3.7
Riyadh 199.29 66.6 132.73 194.11 66.6 129.25 5.18 2.7 0.0 0.0 3.48 2.7
Rome 138.54 64.5 89.40 144.27 57.6 83.09 -5.72 -4.0 6.9 12.0 6.31 7.6
Stockholm 112.76 64.3 72.46 100.70 62.7 63.12 12.06 12.0 1.6 2.5 9.34 14.8
Vienna 90.98 67.3 61.27 94.15 59.2 55.76 -3.17 -3.4 8.1 13.7 5.51 9.9
Zurich 148.31 70.4 104.34 145.09 64.4 93.48 3.22 2.2 5.9 9.2 10.86 11.6
Source: STR Global
2 3
Hotel Construction Costs
The fgures above have been calculated from a survey
which EC Harris has carried out of construction costs
in 50 different countries. Costs are now given per sqm
of gross internal foor area (thus multiplying the above
by the gross area per key tabulated on the last page
of this issue should provide you with a guide cost per
key) and include FF&E.
Construction costs in many parts of the world have
continued to fall over the past year as the global
downturn continues to affect construction workload,
reducing contractors profts and bringing down tender
prices.
Western Europe as a whole remains the most
expensive region. The fall in tender prices in the UK,
down by almost 10% since this time last year, means
that the UK only comes in 8th in the European league.
C
o
s
t
s

m
a
y

i
n
c
l
u
d
e

d
r
y

l
e
i
s
u
r
e

f
a
c
i
l
i
t
i
e
s

b
u
t

n
o
t

s
w
i
m
m
i
n
g

p
o
o
l
s
.
N
o
t
e

t
h
a
t

f
g
u
r
e
s

n
o
w

i
n
c
l
u
d
e

c
o
s
t

e
s
t
i
m
a
t
e
s

f
o
r

F
F
&
E
.
C
o
s
t
s

i
n
c
l
u
d
e

c
o
n
t
r
a
c
t
o
r
s

p
r
e
l
i
m
i
n
a
r
i
e
s

a
n
d

o
v
e
r
h
e
a
d
s

a
n
d

p
r
o
f
t
s
,
b
u
t

n
o

a
l
l
o
w
a
n
c
e

f
o
r

l
a
n
d

c
o
s
t
s
,
l
a
n
d

p
r
o
c
u
r
e
m
e
n
t

f
e
e
s
,
o
r

c
o
n
s
u
l
t
a
n
t
s

f
e
e
s
.
C
o
s
t
s

a
r
e

b
a
s
e
d

o
n

a

c
o
n
v
e
r
s
i
o
n

r
a
t
i
o

o
f

1

=

1
.
1
1
.
Country Budget hotels Mid market - low Mid market - high Luxury
per sqm per sqm per sqm per sqm
UK 1,350 - 1,750 1,700 - 2,210 2,180 - 2,730 2,710 - 3,460
Austria 1,120 - 1,520 1,540 - 1,880 1,790 - 2,800 1,950 - 3,380
Belgium 1,040 - 1,660 1,960 - 2,530 1,810 - 2,730 2,280 - 3,350
Bulgaria 500 - 970 820 - 1,260 970 - 1,500 1,030 - 1,680
Croatia 1,010 - 1,520 1,160 - 1,920 1,320 - 2,100 1,630 - 2,630
Czech Republic 890 - 1,260 1,070 - 1,440 1,340 - 1,860 1,780 - 2,270
Denmark 1,410 - 1,890 1,560 - 2,230 2,280 - 3,080 2,390 - 4,140
France 1,490 - 2,110 2,210 - 2,720 2,030 - 2,740 2,720 - 3,800
Germany 1,690 - 2,620 2,230 - 3,470 2,040 - 3,140 2,490 - 3,790
Greece 900 - 1,240 1,330 - 1,810 1,360 - 2,000 1,880 - 2,500
Hungary 600 - 800 960 - 1,210 1,310 - 2,220 1,580 - 2,650
Ireland 1,750 - 2,110 2,530 - 3,030 2,700 - 3,220 3,190 - 3,600
Italy 1,170 - 1,800 1,290 - 2,050 1,990 - 3,010 2,100 - 3,090
Latvia 960 - 1,210 1,140 - 1,580 1,350 - 1,880 1,550 - 2,300
Netherlands 1,380 - 1,750 1,500 - 1,790 1,640 - 2,070 1,950 - 2,340
Poland 1,030 - 1,810 1,510 - 2,510 1,750 - 2,920 2,190 - 3,950
Portugal 990 - 1,350 1,310 - 1,640 1,510 - 1,810 1,780 - 2,340
Romania 1,010 - 1,320 1,140 - 1,350 1,330 - 1,540 1,570 - 1,740
Russia 1,130 - 1,380 1,730 - 2,080 1,900 - 2,370 2,180 - 3,190
Serbia 850 - 1,210 1,160 - 1,730 1,260 - 1,990 1,630 - 2,280
Slovakia 680 - 1,040 930 - 1,430 1,010 - 1,540 1,190 - 1,720
Spain 1,300 - 1,720 2,300 - 2,760 1,970 - 2,400 2,280 - 3,330
Sweden 1,660 - 2,110 2,090 - 2,740 2,440 - 2,860 2,840 - 3,940
Turkey 1,100 - 1,600 1,200 - 1,880 1,200 - 1,970 1,460 - 2,620
Abu Dhabi - - 1,580 - 2,060 1,780 - 2,620 2,310 - 3,520
Egypt 1,880 - 2,170 2,200 - 2,590 2,350 - 2,810 2,570 - 3,090
Ghana 1,110 - 1,800 1,520 - 2,380 1,690 - 2,420 - -
Oman - - 1,560 - 2,020 1,760 - 2,580 2,270 - 3,470
Qatar - - 1,600 - 2,080 1,810 - 2,640 2,340 - 3,570
Saudi Arabia - - 1,520 - 1,980 1,700 - 2,500 2,220 - 3,360
Source: EC Harris
4 5
Other deals of interest but not listed include the sale
of the Columbus Hotel in Monaco (to be rebranded
a Swisstel) and a few corporate transactions where
ownership has changed materially, including: Hoseasons
(UK), Fairmont~Raffes Hotels International, Regent
Hotels, Tryp Hotels and Interstate Hotels & Resorts.
It is worth noting that although there have been few
deals in the UK, there are many examples where banks
have been extending and amending loans. Examples
include: the owners of 47 Marriotts in the UK, De Vere
Hotels, Ramada Jarvis Hotels, Alternative Hotel Group
and The Rocco Forte Collection.
Prices have been rounded where appropriate. We do not warrant the accuracy of
this data which was obtained from publicly available sources and reported in industry
journals. Conversions to euros were made according to the exchange rate at the time
of the announcement.
6 7
Region Hotel Location No. of Keys Total Price () Price per Key ()
Portfolio Transactions
3x Accor hotels Europe 553 57,000,000 103,000
3x various hotels UK 274 15,700,000 57,000
5x Premier Inns UK 400 40,200,000 100,000
Single Asset Transactions
CEE Mercure Zabatova Bratislava, Slovakia 175 17,000,000 97,000
Sheremetievo 2 Hotel Moscow, Russia 247 49,800,000 201,000
France Renaissance Le Parc Trocadero Paris 116 35,500,000 306,000
Pullman Paris La Defense Paris 384 77,200,000 201,000
Bailli de Suffren Hotel Paris 25 5,100,000 203,500
Italy Grand Hotel Timeo
+ Villa Saint'Andrea
Sicily 161 81,000,000 503,000
Novotel + Ibis hotels Nr Florence airport 400 34,000,000 85,000
Spain Hotel Husa Paseo del Arte Madrid 260 50,000,000 192,000
NH Maquinista Hotel Barcelona 92 8,000,000 87,000
Turkey Munamar Hotel Iclemar, Marmaris 180 15,000,000 83,000
Sungate Port Royal Hotel Beldibi, Antalya 989 190,000,000 192,000
UK Park Central Hotel Bournemouth 60 4,400,000 74,000
Travelodge
Bournemouth Seafront
Bournemouth 110 8,200,000 75,000
abba Queen's Gate Hotel London 90 40,000,000 444,000
St Ermins London 285 75,000,000 263,000
Cumberland
*
London 1,019 264,500,000 260,000
Coronation Hotel London 23 3,000,000 131,000
Marriott Marble Arch London 240 61,500,000 256,000
Doxford Hall Hotel Northumberland 25 10,400,000 414,000
New Northumbria Hotel
* *
Newcastle 57 6,700,000 118,000
Charlton House Hotel & Spa
* *
Shepton Mallet 26 3,400,000 129,000
Other Europe Holiday Inn Amsterdam Schipol Amsterdam, Netherlands 342 30,000,000 88,000
Chief O'Neill's Hotel Dublin, Ireland 73 8,500,000 116,000
Motel One Leipzig Nikolaikirche Leipzig, Germany 194 15,000,000 77,000
Marriott Courtyard Stockholm, Sweden 278 66,000,000 237,000
Middle East Four Seasons Cairo at
The First Residence
Cairo, Egypt 269 250,000,000 929,000
Jerusalem Regency Hotel Jerusalem, Israel 505 47,000,000 93,000
* Price for the head lease only
** Sold out of receivership.
Source: Cushman & Wakefeld Hospitality
Transaction Tracker
Unsurprisingly, resort hotels tend to have larger room
bays and more space for amenities compared to urban
hotels, with the gross area per key being signifcantly
larger in resorts.
Hotels in Middle East and Africa (MEA) tend to
offer larger rooms and more amenities compared to
developments in Europe, in both urban and resort
markets.
The ratio of gross to net varies enormously
depending on the quality of hotel, location and region;
whereby the net room area per key can be multiplied
by a factor of 1.3 to 3.1 in order to derive an
indicative gross area per key. 8
Europe MEA
Urban Resort Urban Resort
sqm sqm sqm sqm
Luxury
Net area per key 38 - 60 38 - 70 40 - 60 45 - 70
Gross area per key 90 -120 90 -145 90 -130 95 -145
Upper Upscale
Net area per key 28 - 40 30 - 50 28 - 50 35 - 55
Gross area per key 60 -100 70 -110 70 -140 85 -165
Upscale
Net area per key 20 - 35 20 - 40 30 - 36 30 - 40
Gross area per key 40 - 80 40 - 90 65 -100 70 -120
Mid-market
Net area per key 22 - 28 25 - 30 22 - 30 26 - 33
Gross area per key 40 - 67 50 - 67 45 - 80 70 - 95
Limited Service
Net area per key 13 - 23 21 - 23
Gross area per key 20 - 40 33 - 60
Cabin
Net area per key 6 -15 10
Gross area per key 12 - 30 25
Ratio of gross to net
Luxury 1.8 - 2.5 1.6 - 2.4 1.8 - 2.2 1.6 - 2.5
Upper Upscale 1.8 - 2.5 2.0 - 2.5 1.9 - 2.8 2.0 - 3.0
Upscale 2.0 - 2.3 2.0 - 2.3 1.9 - 2.8 1.9 - 3.1
Mid-market 1.7 - 2.7 1.7 - 2.7 1.9 - 2.8 2.5 - 2.9
Limited Service 1.3 - 2.0 - - 1.4 - 2.6 - -
Cabin 1.5 - 2.0 - - 2.5 - -
Net area per key = size of standard room bay
Gross area per key = total built area of the hotel (including public areas
and back of house) divided by number of keys
Source: Cushman & Wakefeld Hospitality
Hotel Development Parameters
Telephone: +44 (0)20 7935 5000
hospitality@eur.cushwake.com
www.cushmanwakefeldhospitality.com
Contact: Allan Sugg
Telephone: +44 (0)20 7812 2398
property@echarris.com
www.echarris.com/hotels
Telephone: +44 (0)20 7922 1930
info@strglobal.com
www.strglobal.com

2
0
1
0

C
u
s
h
m
a
n

&


W
a
k
e
f
e
l
d

A
l
l

r
i
g
h
t
s

r
e
s
e
r
v
e
d