EU Hotel Supply Reaches 147,000 Hotels and 5.2 million Rooms

European Union hotel supply has reached 147,000 hotels and 5.2 million rooms, a growth similar to that in 2009. Over 80,000 hotel rooms have been added to EU hotel supply, half of which are in Spain, Germany and Italy – markets with an already mature, if not oversupply status.

According to MKG Hospitality, the EU is experiencing a certain level of restructuring, with outdated independent properties fading in favour of new economy-budget hotel products, particularly in France, Germany and the UK.

 Chain hotels are also strengthening their position, with almost 11,500 hotels and 1.3 million rooms, representing just over 26% of the total number of rooms.

“This is still much lower compared to the chain penetration rate in the US, where it reaches 70%, as Europe historically revolves around independently - and family - owned properties. However this is changing fast, with brands becoming the preferred option,” said Director of Development, MKG Hospitality, Vanguelis Panayotis. “As expected, the growing difficulties to find good sites, especially downtown locations, and at reasonable prices, has compelled most European-based hotel groups to favour franchising during this period of development.”

Despite traditionally low bank rates, repayment due dates should also force more real estate asset transactions throughout Europe. As the recovery continues, investors in a financially healthy position will be encouraged to pursue these new opportunities.

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