Hotel occupancies in Belgium, The Netherlands and Luxembourg are on the rise, according to a report from Horwath HTL. Additionally, average room rates have stabilized and profits are increasing. The best results in 2010 were achieved in Amsterdam and in the luxury segment, and expectations for 2011 and 2012 are cautiously optimistic.
The Netherlands stabilizes
The Horwath HTL research shows that the average room occupancy in the Netherlands increased from 62.1% in 2009 to 65.1% in 2010. However, occupancies are still well below the level of 2007, when the average occupancy was 72.5%.
The average room rate stabilized at € 93 in 2010 after droppiong some 11% the previous year. RevPAR recovered as well, from €58 in 2009 to €60 in 2010.
The gross operating profit per hotel room increased by 16%, from an annual €12,133 in 2009 to €14,085 in 2010. Expressed as a percentage of total revenues, the profits increased from 31.1% to 35.4%.
The recovery in the Netherlands is carried by Amsterdam. Occupancies in the Dutch capital increased from 67.5% to 75.1%.The average room rates in Amsterdam increased slightly, from €108 to €109. The profits per room in Amsterdam increased by 33%, to €18,412. This is over 67% higher than the profit per hotel room in the rest of the Netherlands.
Five-star hotels performed the best with average rate in 2010 increasing from €155 to €181, while total revenues increased by 22% and the gross operating profits by 36%.
Belgium & Luxembourg make headway, too
The HOSTA 2011 report shows that the average occupancy in Belgium increased from 63.1% in 2009 to 68.1% in 2010, while the average room rate increased by 7.1%, from €84 to €89. The RevPAR recovered as well, from €53 in 2009 to €61 in 2010. As a percentage of total revenues, the gross operating profit increased from 23.0% to 24.8%.
Brussels showed a strong recovery with occupancy increasing from 64.1% to 69.1%. The average room rate increased by 7.4%, to €101 while RevPAR increased from €61 to €70.
In Luxembourg, the occupancy increased from 62.5% to 64.9%, while the average room rates increased to €92. The RevPAR increased to €60.
Hotel managers in the Netherlands are expecting a slow recovery with muted growth is expected for 2011 and 2012, remaining below 2008 levels. For 2011, the expected average occupancy is 68.2%, with an average room rate of €95. For 2012, the projected occupancy is 70.1% and the projected average room rate is €98. Most Dutch hotel managers (53%) expect that the market will not be completely recovered until 2014 or 2015.
However, hotel managers in Belgium are more optimistic. For 2011, 71.8% occupancy an average room rate of €93 would bring results back to 2008 levels.
Conversion of office buildings
Currently, many plans are being developed to convert empty office buildings into hotels. Due in part to the credit crisis, over 7 million square meters of office space in the Netherlands is unused. At the moment, hotels are being developed in former office buildings in Amsterdam, Rotterdam, The Hague and Utrecht.
More and more hotels are focusing on sustainability and corporate responsibility. On average, the hotels in the Netherlands invested €600 per room in sustainable measures in the past five years. The average payback period is four years, according to Horwath HTL.
The HOSTA report shows that 44% of Dutch hotels now have a sustainability certificate. The most used certificate is Green Key with 80% of all certified hotels.
In Belgium, only 20% of hotels have a sustainability certificate, but many hotels are working on certification by 2012. Investments include energy conservation, LED-lighting and consciousness improvement among guests and staff.