European Hotel Investment Survey 

Experience the future

February 2019

Our latest European Hotel Investment Survey reveals a continued appetite to invest in the sector in 2019. However, challenges around talent shortages and increased employee costs are a concern to UK hotels, while lack of economic growth is seen to be a risk impacting the sector across Europe.

Each year, attendees of the Deloitte European Hotel Investment Conference take part in our industry survey which focuses on the UK and European market. We have shared some of the survey findings here, as well as local statistics on the Irish hotel and tourism market.

Focus on Europe

Amsterdam retains the top spot for the most attractive European city for investment. London has climbed back up to 2nd place but is challenged by Paris in 3rd place. Owing to the moratorium over hotel development, Barcelona has slipped to 6th place after being relatively strong over the last few years, having previously been one of the most desirable markets.

Focus on Ireland 

Key highlights 

  • The Irish tourism industry is currently estimated to be worth 9.2 billion euro annually, employing 270,000 people.
  • Brexit remains a serious challenge to the industry with 39% of all tourists visiting from Britain.
  • Budget 2019 saw the tourism VAT rate increase to 13.5% from 9%, now the 6th largest VAT rate in Europe.
  • 3,300 rooms are currently under construction in Dublin, with c. 900 having opened in 2018.
  • Insurance costs continued to climb in 2018, with the average premium per room reaching 1,150 euro per annum.

Industry concerns

Lack of economic growth tops the list this year with 38% of respondents identifying it among the main risks to the industry in the next five years. In the UK, the main risks focus on staff and profitability: 68% recognise increased employee costs and 63% see skills shortages as high risks to the UK hotel sector in 2019.

Expectations for growth

73% expect Regional UK RevPAR growth to be below 3% in 2019, with Edinburghand Cambridge expecting the highest growth. 87% expect London to achieve less than 3% growth in 2019.

One in four expects negative GOPPAR growth in London and a fifth expect negative growth in regional UK for 2019.

Capturing the consumer
74% believe there should be more hotel brands. The greatest opportunities exist for offerings targeting millennials in the economy segment (55%) as well as midscale 'extended stay' concepts (49%).

About the research 

Over 120 senior hospitality figures from across the world, including owners, lenders, developers and investors answered a series of questions on the European hotel investment market to ascertain their views of key trends and how these will shape the industry in 2019 and beyond.

Download the full European Hotel Investment Survey, with a focus on Ireland here.

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