Chain Hotel Supply Surges in UK and Germany

The UK and Germany have proved to be Europe’s most dynamic markets for chain hotel development over the last ten years, with both markets recording proportionate growth in supply and demand.

Between 2000 and 2010, chain supply in the UK grew by over 47% to reach 251,323 rooms. The number of chain rooms sold increased by over 42%, allowing the UK to be the best performing market in the first decade in terms of demand and chain hotel supply, with an average occupancy rate of 73.5%, with the number of rooms sold surpassing that of France.

Germany is also balanced in both chain supply and demand, each increasing by almost 25% in the ten year period.

“In both markets, new supply certainly stimulates demand. Portfolios continue to go through a restructuring phase, with developers, owners and financers placing their trust in corporate operated brands. In the UK, this is mainly driven by a boom in the economy and budget segments, with the likes of Premier Inn and Travelodge adopting aggressive development strategies, together with many new local brands,” said Director of Development, MKG Hospitality, Vanguelis Panayotis.

In Spain, supply also increased disproportionably, as many real estate developers diversify into the hotel sector and saturate parts of the market.

 Despite still having the largest chain hotel supply in Europe, France is growing slower in both new developments and demand.

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