In this roundup of news from Europe: Accor and IHG depressed H1 numbers and plan recovery; Thomas Willms to leave Deutsche Hospitality; and more.
Hotel News Now each week features a news roundup from a different region of the world. This week’s compilation covers Europe.
Accor’s Bazin sees room to grow from pandemic lows
Accor President and CEO Sébastien Bazin, speaking at the presentation of the French firm’s first-half 2020 earnings, said now is the time to get hands dirty to help industry recovery. He said “whatever (Accor does), clearly everything will have to be disciplined. There is no time now to have fun. We are in a world where there is no margin of error. The team is aware what is going on, and 100% will be results-driven with vigor and discipline,” writes Hotel News Now’s Terence Baker.
Jean-Jacques Morin, deputy CEO and CFO, said revenue per available room was down 59.3% for the first half of 2020 and down 88.2% in Q2, both compared with the same period in 2019. For Europe, H1 RevPAR fell 90.6%.
Bazin said he remains focused on growth, with one deal being discussed the possible reflagging to Accor’s Ibis chain of a handful of Travelodge (U.K.) hotels, following disagreements there between management and landlords. He said “the situation at Travelodge would never have happened without this crisis being there. … I have no idea if we will have 20 Travelodges, or all 500. It will be somewhere between 20 and 500, and that will be a significant increase (to our portfolio).”
STR: Heatwave spurs leisure markets as UK enters recession
The United Kingdom officially entered recession, with its second-quarter gross domestic product having dropped 20.4%, yet another unprecedented sign of 2020’s crisis, according to data from HNN’s parent company STR in a video presentation by director Thomas Emanuel.
The warm weather seen in much of August permitted coastal, leisure destinations such as Plymouth to enjoy occupancy of 92% for the week of 3-9 August, but things are not so rosy in urban markets, notably London, which saw that metric come in for the same period at 27%. Demand has increased parallel to the increased measurements of the thermometer, but STR analysts warn that lead times are very short and looking farther afield to September onwards, business on the books is low and cancellations remaining steady.
Willms to leave Deutsche CEO role
CEO Thomas Willms is to step down after three years from the role of CEO at Deutsche Hospitality/Steigenberger Hotels AG on 30 September. He will be replaced on a temporary bases by CFO and director of human resources Matthias Heck.
In his three years in the role, Willms launched midscale brand MAXX by Steigenberger and bought a majority share in Danish economy brand Zleep Hotels, which since has expanded across the continent.
IHG faces ‘delicate balancing act’ of costs, resources
Management at InterContinental Hotels Group said during the presentation of the firm’s half-year 2020 earnings results that it is likely 10% of its corporate staff might not survive the ravages of the COVID-19 crisis. Paul Edgecliffe-Johnson, its CFO, said the firm’s strategy is for a “rebalancing of our resources, while allowing us to continue investing, but it is a delicate balancing act,” writes HNN’s Terence Baker.
He said total revenue for the first six months of 2020 fell 45% to $1.25 billion from $2.28 billion last year, and revenue from reportable segments declined 52% to $488 million from $1.01 billion a year ago. He also reported that in the Europe, Middle East and Africa region, revenue per available rooms fell 58.9% in H1 and 87.6% in Q2. Despite government restrictions, he said, 84% of its hotels are open in that market.
UK hoteliers face tough decisions as furlough nears end
With the U.K. government’s furlough scheme for employees set to end on 31 October, hotel firms are coming to the realization that such schemes, however helpful, will not be sufficient to save all current jobs, writes HNN’s Terence Baker. Many firms are beginning to have painful conversations now with esteemed colleagues that will change the face of the industry.
As of 16 August, according to the government’s latest statistics, approximately 9.5 million people from 1.2 million companies have been signed up for the scheme at a cost of £35.4 billion ($47.3 billion), with Kate Nicholls, CEO of UKHospitality, stating that when the scheme started in April, the assumption was that it would protect all jobs, but that thinking has changed due to the length and severity of the pandemic and its effect on business.
Spanish hoteliers fear impact of UK quarantine rule
Spanish hoteliers hit hard by being one of the first major economies to experience the brunt of COVID-19 are facing more pressure, this time due to the United Kingdom government’s decision to impose 14-day quarantine restrictions on its citizens visiting the Southern European country, according to HNN contributor Benjamin Jones.
The United Kingdom is Spain’s leading tourism market, Jones said. Hoteliers there state that Spain has a better grip on the virus than does the U.K., and thus there is no need for strengthened rules. In 2019, more than 18 million Britons took their vacations in Spain, racking up 56.5 million overnight hotel stays, according to Spanish government figures, and spending €18 billion ($21.42 billion).
Deals and developments
- KGAL Investment Management GmbH & Co. KG has bought for €250 million ($298 million) the Perlach Plaza development in Munich from Concrete Capital and BHB Bauträger GmbH Bayern. The soon-to-open development contains approximately 30,000 square feet of hotel, retail, apartment and student-living space.
- Bob van den Oord has been promoted at Langham Hospitality Group to COO from managing director, The Langham, London, and regional vice president, operations, Europe, Middle East and US.
- Saudi Arabia-based conglomerate Zahid Group has grown its holdings in Irish hotel group Dalata Hotel Group, whose brands include Clayton and Maldron, to 4%.
- Rosewood Hotels & Resorts is to open the Rosewood Porto Cervo, on the Italian island of Sardinia, in 2022, a 65-room property owned by Quianto Capital Ltd.
- Also in Sardinia’s Costa Smeralda area and also with Quianto, Accor and partner company SBE are to debut the Delano brand with a 65-room conversion due to open in 2023; the partnership plans on six additional properties in Europe.
- Fattal Hotel Group has signed a €57.4 million ($68.3 million) sale-and-leaseback deal with owner Art-Invest Real Estate for the 346-room Leonardo Royal Berlin Alexanderplatz and announced it has also signed a long-term lease on another site, in the Adlershof area, for what will be its German flagship.
- Deutsche Hospitality is to open in fall 2021 the 133-room Zleep Hotel Glostrup, a new-build in the Copenhagen suburb of Glostrup in partnership with owner Oskar Group, and 124-room Zleep Hotel Hamburg to open in 2022 with owners and developers Bünemann & Collegen and BBU.Projekt Architekten BDA.
Compiled by Terence Baker.