Europe’s hotel construction pipeline to improve as travel increases

There is optimism that delayed projects will “soon” come back online after international arrivals to Europe increased nearly 75% year-on-year – a “significant driver” of hotel development – according to the latest report by Lodging Econometrics (LE).

In the 2021 year-end Europe Hotel Construction Pipeline Trend Report by LE analysts revealed Europe’s hotel construction pipeline stands at 1,824 projects and 295,152 rooms at the close of the fourth quarter.

From 2014 through 2020, Europe’s construction pipeline experienced a “steady” year-over-year (YOY) increase in project totals.

Starting in Q2 2021 and continuing throughout the year, this trend has been reversing with the region’s construction pipeline totals falling slightly below 2019’s year-end totals. This drop in project totals is due to development and opening delays, project cancellations, as well as other project obstacles related to the pandemic.

Nevertheless, LE said Europe has seen a “swell” in domestic and inter-regional travel over the past year with the UK leading the construction pipeline with project and room counts in Q4 ’21, at 313 projects/48,770 rooms. LE is forecasting another 474 new hotels, accounting for 70,242 rooms, to open in Europe in 2022 and another 504 new hotels with 75,015 rooms to open in 2023.

Projects and rooms counts in the early planning stage are both up 7% YOY, ending Q4 with a record high of 494 projects accounting for 80,060 rooms, also a record high room count for this stage in the region.

In addition, announced renovation and conversion project and room counts are also up at the end of Q4, with a “record high” of 433 projects/62,368 rooms, up 19% by projects and up 21% by rooms YOY.