Dutch hotels attract more than just tourists - Savills
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Q1 2018
Dutch hotels
attract more
than just tourists
Spotlight | Hotels
The Netherlands
spotlight
Savills World Research
savills.nl/research
Spotlight | Hotels | The Netherlands Savills World Research | Q1 2018
The Netherlands ranks as
compressing higher
the fifth largest Eurozone
Yields Occupancy economy with one of the
lowest unemployment rates
and a GDP capita of above
€ 41,000.
contracting record
Overnight Investment With its highly stable
Stays Volume
economy, the Netherlands
is one of Europe’s most
introduction
sought-after investment
new developments increasing markets.
Supply Room Rates
Economy and Tourism Supply, Room Rates, Occupancy and RevPARs
GRAPH: HOTEL SUPPLY KEEPS INCREASING
Tourism in the coming from other European countries,
especially Germany, the UK and Belgium.
have their headquarters in Amsterdam such
as Philips, Heineken and AkzoNobel and Not only is the
(SOURCE: CBS, FORECAST BY SAVILLS BASED ON DEVELOPMENTS)
Netherlands is at an
These numbers are forecasted to grow even tech giants Uber and Amazon. Furthermore,
number of hotel
350.000 3.750
more due to the economic upswing, but also the European Medicine Agency (EMA)
due to the fast expanding middle class in recently announced they will relocate from 300.000 3.700
all-time high. countries such as China, India and Brazil. London to Amsterdam in 2019. This institute guests increasing, 250.000 3.650
For this group, travelling becomes more and attracts approximately 30,000 visitors a year
This also can be seen in the hotel market
more within reach. and will therefore have a positive impact on
the hotel market in Amsterdam.
the number of 200.000 3.600
hotels in the
150.000 3.550
which, in 2017, benefitted from 28.5 million Amsterdam is by far the most popular
hotel guests - a new record and up 10% destination in the Netherlands, accounting Rotterdam is the second most popular 100.000 3.500
compared to 2016. The overnight stays
increased by almost 9%, a hotel guest
for almost half of the foreign visitors. This is
partly due to the cultural amenities the city
destination within the Netherlands, while
smaller cities such as Utrecht and Maastricht Netherlands is 50.000 3.450
stays for on average 1.7 nights in Dutch
hotels. Nearly half of the guests came from
has to offer, such as the world-famous canals
and museums, and the appeal to business
saw the highest proportional increase in
hotel guests last year with +36% and +26% increasing as well. 0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
3.400
abroad, with the largest volume of guests travellers thanks to large companies who year-on-year growth respectively.
NUMBER OF ROOMS NUMBER OF BEDS NUMBER OF ACCOMMODATIONS
At the start of 2017 there were about 3,625
hotels (+1.1% compared to 2016), with a total
GRAPH: OVERNIGHT STAYS (SOURCE: CBS; SAVILLS FORECAST) of approximately 123,500 bedrooms (+2.1%) GRAPH: LARGE DEMAND CAUSES RISING ROOM RATES (SOURCE: HOSTA 2017)
providing 269,000 beds (+3.0%).
The number of hotel visitors and overnight stays in the Netherlands is increasing to new records €120 76%
These numbers also indicate that new 74%
€100
developments are becoming larger on the 72%
60.000.000 whole. This growth of facilities is lower than 70%
€80
the growth of tourists and overnight stays 68%
50.000.000
which resulted in higher room rates and €60 66%
DOMESTIC OVERNIGHT occupancy, as shown in the graph below. 64%
40.000.000 STAYS
€40
62%
In Amsterdam, room rates and the revenue
30.000.000 60%
INTERNATIONAL per available room (RevPAR) are the highest €20
OVERNIGHT STAYS 58%
20.000.000
and are forecasted to increase further to €139
and €110 this year respectively. This keeps 0 56%
HOTEL GUESTS Amsterdam in the top 10 of cities in Europe 2009 2010 2011 2012 2013 2014 2015 2016
10.000.000
with the highest average room rates.
AVERAGE ROOM RATE RevPAR ROOM OCCUPANCY
0
2012 2013 2014 2015 2016 2017 2018
1 1
Source: CBS 2
2
Source: PWC, Standing out from the crowd - European cities hotel forecast for 2017 and 2018
Spotlight | Hotels | The Netherlands Savills World Research | Q1 2018
TABLE: LARGEST HOTEL DEVELOPMENTS IN AMSTERDAM GRAPH: HOTEL INVESTMENT VOLUME WENT SKY-HIGH GRAPH: CHINESE AND GERMAN INVESTORS WERE THE MOST
ACTIVE PLAYERS ON THE DUTCH HOTEL MARKET IN 2017
HOTEL NO. OF ROOMS CLASS OPENING
AMSTERDAM CITY HARBOUR HOTEL 245 UPSCALE CLASS 2018
VEN - PARK INN BY RADISSO 476 UPSCALE CLASS 2018
OLYMPIC HOTEL 309 UPSCALE CLASS 2018 €2000M
LEONARDO AMSTEL HOTEL 490 UPSCALE CLASS 2018
POSTILION 252 UPPER MIDSCALE CLASS 2018 €1800M
QO CROWNE PLAZA 288 UPSCALE CLASS 2018
RENAISSANCE HOTEL AMSTERDAM SCHIPHOL 250 UPPER MIDSCALE CLASS 2018 €1600M
HOLIDAY INN EXPRESS 439 MIDSCALE CLASS 2019
NHOW HOTEL 650 UPSCALE CLASS 2019 €1400M
VAN DER VALK EXCLUSIER ZUIDAS 240 UPPER UPSCALE CLASS 2020
LANDMARK HOTEL OOSTENBURG 300 UPSCALE CLASS 2020 €1200M
MELIA 328 UPSCALE CLASS 2020
MARITIM HOTEL 579 UPSCALE CLASS 2020 €1000M
TABLE: MAJOR HOTEL DEVELOPMENTS IN THE REST OF THE NETHERLANDS €800M
HOTEL CITY NO. OF ROOMS CLASS OPENING
€600M AVERAGE
CROWN PLAZA + HAMPTOM BY HILTON UTRECHT 328 UPSCALE CLASS / MIDSSCALE CLASS 2018
INDIGO ROYAL PALACE THE HAGUE 63 UPSCALE CLASS 2018
€400M
PLAZA HOTEL ALMERE 158 UPSCALE CLASS 2018
VAN DER VALK APELDOORN 151 UPPER MIDSCALE CLASS 2018
€200M
HOLIDAY INN EINDHOVEN 180 UPSCALE CLASS 2019
UNITED STATES OF AMERICA CHINA
MOVENPICK HOTEL DEN HAAG THE HAGUE 72 UPPER MIDSCALE CLASS 2019
0 UNITED KINGDOM GERMANY
VEN ROTTERDAM N/A LUXURY CLASS N/A
2010 2011 2012 2013 2014 2015 2016 2017 SINGAPORE
AMRATH UTRECHT 250 UPSCALE CLASS 2020
FRANCE THE NETHERLANDS
VAN DER VALK DEN HOORN 140 UPPER MIDSCALE CLASS 2020
SAX BUILDING ROTTERDAM 150 N/A 2022
Developments Hotel Investments
In order to keep up with this will be less substantial, since the municipality introduced a ‘hotel
stop’ in January 2017. Traditionally only specialised hotel It is noteworthy that one third of all investments came from German
investors while the share of Dutch investors was relatively low.
growing demand for hotel This means that as of that date, no new permits for hotel investors were active in the sector. One of the reasons for this is that Dutch investors are more used to
making investments based on the property value instead of cash
accommodation an increase in developments will be issued in certain areas, including the largest part
of the city centre. In other areas such as the South Axis, the West Axis Due to the search for yields, and the diversification possibilities,
flow, which gave foreign investors a head start in recent years. Also
noteworthy is the increasing activity of investors from Asia, and
developments has been recorded. and parts of East and Southeast, developments are allowed if they
meet certain criteria and add something “special” to the area, like an
investors without a history in the hotel sector are now looking at
investment opportunities as well.
especially China.
innovative concept. About a quarter of 2017 investment volume was from Asian investors,
Most developments are taking place in the Amsterdam area, where These are important reasons why hotel investments reached a record including the largest deal in 2017, the purchase of DoubleTree by
approximately 4,000 rooms will enter the market in 2018, representing In addition to the developments in Amsterdam, Savills has identified in 2017 with about €1.8bn invested; a remarkable increase of 200% Hilton Amsterdam Central Station for €350m by Chinese investor
an increase of 13% of total supply. more than 1,400 hotel rooms across the country which will be compared to the previous year. Almost three quarters of the total Anbang Group. This increase in Asian investments is also being seen in
entering the market by 2020. In the tables above the largest hotel investment took place in Amsterdam, underlining investors belief that other markets such as the UK. The table below details other large hotel
In the period 2019-2020 another 3,000 rooms are expected to be developments in Amsterdam and the rest of the country are listed. this city will remain a key tourist and business destination. investments in the Netherlands.
added, which will bring the total supply of hotel rooms in Amsterdam Quite noticeable is that almost all developments are for upscale,
to almost 40,000. The number of new hotel developments thereafter 4-stars hotels.
MAP: LARGEST HOTEL DEVELOPMENTS IN AMSTERDAM
O
SS
TABLE: LARGEST HOTEL INVESTMENTS 2017
DI
RA
L
RG
TE
BY
SS
U
O
HOTEL CITY ROOMS CLASS PURCHASE PRICE PURCHASER VENDOR
BO B
H
N
RE
AR EN
IN
R
L
XP
U
H ST
K
TE
DOUBLETREE BY HILTON AMSTERDAM AMSTERDAM 557 UPSCALE CLASS €350M ANBANG GROUP BLACKSTONE
AR
E
O
O
N
O
-P
H
CENTRAAL STATION
IN
EL
IM
N
Y
AM OT
Y
IT
DA
VE
IT
HOTEL W AMSTERDAM AMSTERDAM 238 LUXURY CLASS €260M DEKA STAG EUROPE
AR
RD H
C
LI
M
ID STE RK
O
·
(INCL. THE DUCHESS)
H
A
·
AM DM
·
QUEEN BILDERBERG PORTFOLIO 1,633 UPSCALE CLASS €205M FIRST SPONSOR GROUP GOLDMAN SACHS/KKR
L AN
AS
NH BARBIZON PALACE AMSTERDAM 268 UPPER UPSCALE CLASS €155.5M DEKA NH HOTELS
·
·
ZU
NHOW HOTEL AMSTERDAM 650 UPSCALE CLASS €150M AXA IM COD/BEING DEVELOPMENT
EF
SI
CONGRES HOTEL OVERHOEKS AMSTERDAM 579 UPSCALE CLASS €125M IES IMMOBILIEN ABN AMRO BANK
A
L
LU
EL
AZ
H HO
T
C
LK L
PL
O
VA TE
W IP
EX
HYATT PLACE AMSTERDAM AIRPORT HOOFDDORP 330 €53.8M AVIGNON CAPITALIEN HILLGATE INVESTMENTS
H
VA HO CH
O
E
C
IL WN
HOTEL UPSCALE CLASS
PI
S
ER Ã
N
M
M
ST O
I
O
ST EL
LY
R
DA
R
HILTON ROTTERDAM 254 UPPER UPSCALE CLASS €50M (2018) FIRST SPONSOR GROUP N/A
LI
PO C
DE
M
O
N
O
N
Q
·
·
· ·
OLYMPIC HOTEL AMSTERDAM 309 UPPER MIDSCALE CLASS €46M ALEX CHANG, KUNSHANG CHRIS LUKEN
AM
·· ·
AND WENZHOU TONYONG
L
L
TE
LOCKS
TE
O
O
H
H
HOTEL NH AMSTERDAM ZUID AMSTERDAM 213 UPSCALE CLASS €45M AVIGNON CAPITAL RJB
E
EL
C
ST
AN
CROWNE PLAZA & HAMPTON BY HILTON UTRECHT 328 UPSCALE CLASS / MIDSCALE €26.4M FIRST SPONSOR GROUP KLEPIERRE
AM
SS
CLASS
AI
DO
N
RE
AR
N
·
O
LE
3 4Spotlight | Hotels | The Netherlands Savills World Research | Q1 2018
GRAPH: THE YIELD GAP IS DECREASING
6%
5%
7%
6%
5%
PRIME HOTEL
4%
3%
YIELD GAP
2%
1%
BOND YIELDS NL (10YR)
0%
2013 2014 2015 2016 2017 Q4
Yields Outlook
Due to the fact that the hotel investment
market is so specialised and perceived to
yield of hotels is high, this gap is decreasing
as indicated in the graph above. Because
markets, are more accepting of these ‘low’
yields. This is one of the principle reasons
Due to the growing number of visitors and the limited growth of hotel
developments, Savills expects that room occupancy and rates will keep
“The increase in the number of hotel
be more risky than commercial investments, demand for hotel investments is higher than why hotel investment has been dominated increasing in the years to come. This is positive for hotel turnover, which rooms in Amsterdam is considerable,
typically only investors with extensive
knowledge of the sector are active in the
current supply, gross initial yields for prime
locations like the city centre of Amsterdam
by international investors over recent years. makes the hotel sector very appealing.
however the increase in the number
market. fell considerably over the past 12 months Due to the low supply of hotel investment In the search for yield we see a growing interest in the hotel market by of tourists is increasing even faster,
Notwithstanding that, we are increasingly
and currently stand at 4.25%. opportunities in prime Amsterdam locations,
investors are increasingly looking towards
investors who may never have invested in the hotel market previously.
Due to this growing demand we expect that yields will compress
which strengthens hotel investment
seeing new investors enter the market For national investors this is quite a sharp other markets causing yield compression in even further. This in turn will make the option of sale-and-lease-back fundamentals.”
seeking to diversify the product and income yield compared to other asset classes. these locations as well. Prime gross yields in increasingly interesting for hotel operators who own the property. For
mix within their portfolio. And, whilst when However, international investors who are Utrecht for example have sharpened to 6.0% these reasons we expect a substantial investment volume in 2018, again
compared to bond yields the gross initial comparing yields across several global from 8.0% in 2014. dominated by international investors. - Bas Wilberts
Hotel market use, while The Student Hotel is a great example of the blurring of 3 Tips for Investors
lines between the hotel and student housing sector.
Trends Online marketplaces for lodging like Airbnb are already familiar;
with Airbnb boasting a market share of approximately 11% of
1. Value hotels on cash flow and
operator, not on the value of the
all overnight stays in Amsterdam and around 7% in other cities bricks-and-mortar
There is a universal expansion in travel accommodation types like The Hague and Rotterdam. In order to manage nuisance and
available to consumers, driven largely by the tastes and demand liveability in some areas, municipalities have put restrictions on
2. Food & bevarages deserve
of ‘millennials’. An example is the increase in boutique hotels Airbnb. As of 2019, house owners in Amsterdam are allowed to
a separate assessment
(like Generator and Vondel Hotels). rent their house for a maximum of 30 days (60 days currently).
Another trend is blurring hospitality with other uses, allowing This is already the case in Amstelveen, a neighbouring
3. Hotels on secondary locations
operators to better monetise communal space and add vibrancy municipality of Amsterdam. In Rotterdam and Utrecht there are are becoming more stable due
that can add to the guest experience. Short stay apartments (like initiatives to introduce a maximum of 60 days. This, of course, is to the spread of tourism. This
Zoku and Element) are an example of blurring with residential positive for the hotel sector as well. offers opportunities.
5 6Spotlight | Hotels | The Netherlands
Focus on Amsterdam
Most developments are taking place in the Amsterdam area,
where approximately 4,000 rooms will enter the market in
2018. In the period 2019-2020 another 3,000 rooms are
expected to be added.
Large volume developments
New hotel developments are becoming larger, which makes
these developments interesting for investors who are used to
large investment volumes.
Record high investments
Hotel investments reached a record in 2017 with about €1.8bn
invested; a remarkable increase of 200% compared to the
previous year.
Foreign interest
German and Asian investors are most active on the Dutch
hotel market. Only a small share of the investment volume
was from Dutch investors.
key
Expanding portfolios
New investors are entering the market, seeking to diversify the
product and income mix within their portfolio.
findings
Interesting Yield
Gross initial yield for prime locations fell considerably over the
past 12 months and currently stand at 4.25%
Want to know more? Meet our team at Savills
call us at +31 (0) 20 301 2000 Property starts with people
Bas Wilberts Marco Peetsma Robert stapleton Adriaan Tervoort Jordy Kleemans
Head of Alternative Associate Director Director Head of Research &
Investments Alternative Investments Savills Hotels Savills Valuations Consultancy
b.wilberts@savills.nl m.peetsma@savills.nl rstapleton@savills.com a.tervoort@savills.nl jordy.kleemans@savills.nl
+31 (0) 20 301 2011 +31 (0) 20 301 2034 +44 (0) 20 7409 8029 +31 (0) 20 301 2020 +31 (0) 20 301 2000
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