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European hotel cards are shuffled.
Sunday, 18th March 2007
Source : MKG Consulting
The boost received by Europe's chain supply followed through and the supply grows by 2.3%, for a positive balance of 262 hotels and 28,661 rooms. And the majority of the ten leaders of Europe's hotel industry continue to expand their network. The growth of the Top 10 continental groups brought the supply to 19,342 rooms, or up 2.8 % and representing more than half of the growth of all the groups present in Europe.

Accor is always solidly positioned in first place of this ranking. While two thirds of future rooms will be located in countries where the hotel industry is booming (China, India, Russia, Middle East), Accor is not ignoring a continent that is as strong as Europe in its development strategy.

At Accor, throughout the continent, economy and hard-budget brands are the group's priority. Ibis, as dynamic as ever, thus progresses by 3.3%. Brand work - segmentation within Mercure with the creation of the luxury label Grand Mercure, and the new image of the Novotel brand – caused a slight drop for these two banners, whereas Etap Hotel, continues to see its portfolio grow  (+ 5.7%).

After a period of rationalizing its supply, Best Western fully resumed growth with the affiliation of ten or so hotels in Germany, Italy and Sweden. Nonetheless it is in France and the United Kingdom that the greatest number of openings was recorded. The American group thus grew by 2.8% beginning 2007.

2006 will be a milestone year, marking Express by Holiday Inn's tenth years in Europe. This year the economy brand confirms its high growth potential (+5.3%). Its elder Holiday Inn is down (-1.5%), primarily due to the end of certain management contracts within the framework of its policy for selling hotel walls.

Starwood Capital's buyout of the number-two French group led to a period of repositioning at Louvre Hotels. The end of affiliations with the Concorde brand and the withdrawal of Kyriad explain the group's drop this year. These losses were not compensated for by the slight growth of the economy brands Première Classe (+0.8%) and Campanile (+ 0.4%). Consequently, Louvre Hotels is surpassed in the ranking by Hilton, which becomes the fourth European hotelier.

The Hilton brand saw its supply expand with eight upscale properties, including 2 in the United Kingdom. 2006 will have been Hilton's Italian year. American groups firmly established on the European continent continue to see their supply grow the way Starwood did (+ 3.7 %). The difficulties encountered by the group Choice Hotels Europe led to a global reorganization of the American franchiser's strategy in Europe. In the future, the group should be able to move ahead again and stem the drop in affiliations experienced by its leading brands Comfort (-3.0%) and Quality (-5.0%).

Spain also had a lively 2006. Spain's real estate market is recovering. Thus, like the other leaders on the sector, the Spanish group Sol Melia launched an asset disposal strategy. Spanish hoteliers show particularly dynamic development in 2006: Iberostar, Barcelo, Silken but also Riu Hotels (+13.9%), the brand belonging to TUI which is reinforcing its presence in the Iberian peninsula to become the number-ten brand in Europe. But what was decidedly most striking is their compatriot NH Hoteles. The group rose to eighth position. After Astron in Germany, then the Krasnapolski and Golden Tulip in the Netherlands, NH Hoteles pursues its external growth strategy and the development of a network in Italy. Its subsidiary NH Italia took control over Jolly Hotels and its forty hotels. This rise to the top was expected as NH already owned 20% of shares in Jolly.

Another group center stage in 2006 is Rezidor. As proof of its dynamism, the group completed an important stage in its history by entering the Stockholm stock exchange. The master franchiser of brands in the Carlson group officially became The Rezidor Hotel Group in the last quarter last year. Its ex-owner SAS put its 75% on the market. Carlson took advantage of this entry into the market to increase its holdings in Rezidor from 25% to 35%. Rezidor continues to actively develop the Radisson (+3.8%) and Park Inn (+6.7%) brands. 

The British hotel industry is bubbling. The excellent results of the United Kingdom's hotel industry is breeding envy. The investment fund Dubai Investment Capital, an emanation of Dubai Holdings belonging to the Emirate's royal family, resumed operations of the chain Travelodge and its 290 properties in Permira. This acquisition surpassed one billion euros and Dubai Investment has ambitions for Travelodge (+6.0% in 2006). The investor plans to carry the latter up to the top step of economy hotels across the channel with the Olympic Games in London in 2012.

Travelodge will find itself up against a sizeable adversary in this race: Premier Travel Inn. When Travelodge was put up for sale it had attracted Premier Travel Inn's owner, the Whitbread group. But the high price and the fear of finding itself in a monopoly caused it to withdraw. Which did not prevent the economy brand and number-eight European brand from developing rapidly in 2006 (+ 6.9%). The growth perspectives of Premier Travel Inn continue to receive much attention, particularly from Starwood Capital.
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