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Europe hotel development to focus on a budget segment

Hotels in Europe steadily recover from crisis of 2008, showing better RevPAR figures, but building new objects is still a risky decision. Investors understand this and so the great proportion of new projects can be referred to as budget or limited-service hotels.

As HVS consultant Davis Langdon says, today developers and operators do not want to invest large amounts of money into luxury hotels in Europe. In the situation when whole hotel industry is not “healthy” it’s much more reasonable to invest into budget accommodations that are built faster and are less costly.

According to the figures of first 6 months of 2010, midscale and upscale hotels in Europe show the best recovery results with RevPAR reaching double digits. While financial analytics make careful forecasts concerning economic recovery, tourists still prefer to remain savvy. The decline to invest into expensive and luxury hotels in expected to continue until 2013 or even 2014.

In the nearest future around 100 midmarket hotels are expected to be built in Europe. This will bring to the market approximately 10,700 rooms. The highest number of budget hotels will be built in price-conscious United Kingdom, the second place is occupied by hotels in Spain and Germany is ranked third.

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