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European Hotel Investment Survey

Experience the future

November 2018

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.

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.

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 Edinburgh and 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.

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