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MARKETBEAT
BELGIUM HOTELSH1 2017
CONTENTS
01 Executive summary
02 Economic overview
03 Supply
04 Demand
05 Investment market
2Cushman & Wakefield | Marketbeat Belgian Hotels H1 2017
The Belgian hotel market's recovery from
the negative consequences of the Paris and
Brussels terrorist attacks is well underway.
• The market is offered respite by a wave of
consolidation after the number of existing
establishments had decreased in several successive
years (Figure 1). International investors and operators
are now evaluating their presence and are expanding in
key locations. This is underscored by an ever-
increasing pipeline of premises with more than 100
rooms. In addition the average number of rooms per
establishment is on the increase.
• The Belgian market showed its resilience to negative
consequences from 2016 attacks. Although the number
of arrivals and overnight stays decreased in 2016,
these figures were still higher than those of 2014 (2015
having been a peak year). In addition, the number of
nights per arrival remained at a high of 2.42 in 2016.
• Recovery is underway in Brussels which bore most of
the brunt from the attacks with foreign tourists having
retreated somewhat in their immediate aftermath.
Indeed the 12-month moving average occupation rate
has increased every month since its nadir in October
2016.
• Specialised international investors are prominent, with
Belgians accountable for 8% of the total invested
volume since 2011. Brussels' landmark former
Sheraton hotel has been purchased by PrimeCity
Investment from Cyprus.
BELGIUM HOTELS
H1 2017
Figure 1
Evolution of the hotel supply in Belgium
Source: Eurostat
56,000
57,000
58,000
59,000
60,000
61,000
0
500
1,000
1,500
2,000
2,500
2012 2013 2014 2015 2016
Number of establishments (LHS)
Number of bedrooms (RHS)
3Cushman & Wakefield | Marketbeat Belgian Hotels H1 2017
ECONOMIC OVERVIEW
Figure 2
GDP Growth, %
Internal demand boosts GDP growth.
GDP growth is expected to post a robust 1.7% growth this
year (compared to 1.2% in 2016) and 1.6% in 2018, mainly
thanks to the rebound in European trade activity and a firm
domestic demand (Figure 2). This is underpinned by
reductions in the unemployment rate which will boost
earnings as well as increased confidence indicators.
Confidence indices remain high.
Despite witnessing a slight decrease since May, consumer
and business confidence remain at high level so far this
year, helped by a favourable labour market and positive
perspectives in the economy (Figure 3).
As far as consumer macroeconomic estimates are
concerned, fears of a rise in unemployment over the
coming twelve months slightly increased while the outlook
for the general economic situation remains unchanged.
Business confidence slightly decreased in the business-
related services sector as well as in the manufacturing due
to an expected decrease of the global demand.
Conversely, the trend remains on the upside in the
construction sector.
Figure 4
Evolution of Accommodation & food services indicators,
Belgium, %
Growth outlook in the accommodation
and food services sector in part
attributable to consolidation trend.
While perspectives for economic growth in the
accommodation and food services sector are positive over
the 2017-2021 period, varying between 1% and 2%,
growth in employment is expected to be depressed,
hovering between 0.1% and 0.9% over the same period
(Figure 4).
With regards to accommodation services this outlook can
be linked to the consolidation trend whereby the number of
establishments is decreasing (hence fewer new jobs) and
hotels are looking to maximise revenue by focusing their
offerings on strategic locations.
Figure 3
Consumer and business confidence indices
Source: Oxford Economics
Source: Oxford Economics
Source: National Bank of Belgium
-3.00
-2.00
-1.00
0.00
1.00
2.00
3.00
Gross value added Employment
-30
-25
-20
-15
-10
-5
0
5
10
Consumer confidence Business confidence
-1.00
-0.50
0.00
0.50
1.00
1.50
2.00
2.50
Eurozone Belgium
4Cushman & Wakefield | Marketbeat Belgian Hotels H1 2017
Figure 7
Distribution of establishments per star rating
Source: FPS Economy, 2012
SUPPLY
Market offered respite by consolidation
after successive years of shrinkage.
Eurostat figures indicate a fifth successive annual
decrease of the number of hotels in Belgium, to 1,522
establishments in 2016 (Figure 5). Nevertheless the
decrease has been fairly marginal (35 fewer in 2016
against a peak decrease of 320 establishments in 2012).
Additionally the number of rooms has increased for the first
time since 2011 to 58,791 in 2016, bringing the average
number of rooms per hotel to 39. Indeed, the average
number of bedrooms per establishment has continuously
increased since 2011.
This phenomenon can be explained by the increasing role
of international players including investors (property-wise)
and international companies (operations-wise), carrying
out arbitrations and consolidations of their portfolios and
looking to increase revenue from strategically located
establishments. Indeed, many new hotel projects (detailed
on the next page) include more than 100 rooms.
At the other end of the spectrum small local independent
players’ market share also suffers from the additional
competition that Airbnb-type structures constitute.
Regulation measures for such platforms have been set up
and increased tax inspections have been put in place, but
the trend has been resolute.
The share of establishments per region has changed very
little over the past years - Brussels and Flanders have
each gained 1% in share since 2012 (Figure 6).
The most recent breakdown of hotels made available by
Statistics Belgium (FPS Economy), outlines the dominance
of three-star establishments (Figure 7).
Figure 5
Evolution of the hotel supply in Belgium
Source: Eurostat
Figure 6
Distribution of establishments per region
Source: Eurostat, 2016
1*10%
2*23%
3*43%
4*15%
5*1% Not
rated8%
Brussels12%
Flanders57%
Wallonia31%
56,000
57,000
58,000
59,000
60,000
61,000
0
500
1,000
1,500
2,000
2,500
2012 2013 2014 2015 2016
Number of establishments (LHS)
Number of bedrooms (RHS)
5Cushman & Wakefield | Marketbeat Belgian Hotels H1 2017
Projects underscore the sector’s long
term confidence.
Every quarter, several new projects are announced and
delivered throughout the country – a testament to the
sector’s long term prospects.
Several new hotel projects are integral to multifunction
schemes, where developers understand the requirement to
diversify their mix in order to create sustainable projects.
Follows a non-exhaustive list of projects and recent
deliveries announced during the first half of 2017.
Flanders
• In Diegem the Park Inn by Radisson Brussels Airport
opened in Q1 in the reconverted Twin Squares Prater
office building. The 162-room hotel is owned by
Upgrade Estate.
• ION plans to develop a mixed-use project in Waregem
which will include a 60-room hotel.
• Antwerp: The opening of the 135-room Park Inn by
Radisson at Post X in Berchem is still scheduled for the
beginning of 2018.
• Ghelamco is developing the 243-room “Ringhotel” next
to KAA Gent’s Ghelamco Arena soccer stadium.
Brussels
• The capital’s second Meininger hotel will open its doors
on Rue Bara near the Midi station in 2019. The
building, owned by Nelson Group (also the owner of the
Meininger at the former Brasserie Belle-Vue) will
include 668 beds spread across 150 rooms.
• Maltese group Corinthia will invest heavily in the
refurbishment of the Astoria hotel as planned, with an
expected reopening in 2019. The premises will include
126 rooms and suites. Corinthia’s ambition for the hotel
is to gain the status as the best in Brussels.
• In June, NH Hotels opened its 192-room NH Collection
Grand Sablon. The NH Collection range targets an
upscale clientele.
Wallonia
• In Champion (Namur), Actibel is currently developing
its Ecolys Business Center, a mixed-use scheme which
will include a 120-room hotel expected to be delivered
around spring 2018.
• Three major projects are currently underway within a
small radius in Liège:
• The former Holiday Inn (“Hôtel Alliance”) next to the
Palais des Congrès has been demolished and will
be replaced by a 219-room Van der Valk by the
beginning of 2018.
• Marriott will open a 140-room Moxy on the
Boulevard de la Sauvenière in 2019.
• A 100-room Park Inn by Radisson is expected to
open near the Cadran from 2020.
• A Novotel will open within the setting of the recently
opened Rive Gauche shopping centre in Charleroi. The
four-star hotel will include 128 rooms.
• In Spa there is a project to extend the existing
Radisson Blu Balmoral by 74 rooms.
• Permits for the controversial 120m-high hotel tower in
Wavre have been cancelled following several appeals.
SUPPLYPIPELINE
6Cushman & Wakefield | Marketbeat Belgian Hotels H1 2017
BELGIUM
Figure 9
Share of arrivals and overnight stays per type of
establishment in 2016
Source: FPS Economy
DEMAND
Belgian market shows its resilience to
negative consequences from 2016
attacks.
Arrivals and overnight stays experienced decreases (both
close to -4%) in 2016 as a direct result of the 22 March
attacks (Figure 8). Nevertheless they remained superior to
2014 in absolute figures with a degree of momentum
sustained from a mostly buoyant 2015. The total number of
recorded arrivals in 2016 amounted to 15.2 million for a
total of 36.8 million overnight stays.
The average number of nights per stay, which had
increased by a substantial 8% in 2015 to 2.42 nights per
stay (the highest level recorded since 2007) has remained
at exactly the same figure in 2016.
Foreign visitors represent 49% of arrivals and 46% of
overnight stays in 2016 across all forms of collective
accommodation establishments (i.e. including campsites,
holiday apartments, etc.). Their share of arrivals has
decreased from 53% in 2016, again a probable result of
the attacks in March 2016.
Hotels represent 65% of arrivals and 47% of overnight
stays in 2015 (Figure 9).
On the basis of the top ranked municipalities in 2016, it is
reasonable to assume that the Brussels region bore most
of the negative consequences from the terrorist attacks
coupled with a reduced presence of foreign visitors.
Tellingly, Ixelles (favoured by foreign tourists) has been
replaced by coastal town De Haan (favoured by Belgian
tourists) in the ranking. The rest of the ranking remains
unchanged. Additionally, while Antwerp and Bruges retain
approximately a million annual visitors, Brussels
(municipality) retains its top ranking, albeit having recorded
a 14% visitor decrease in 2016 (Figure 10).
Figure 8
Evolution of tourist visitors and overnight stays
Source: FPS Economy
Figure 10
Top ranked municipalities by number of tourist
visitors in 2016
Source: FPS Economy
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Arrivals Overnight stays
Hotels Youth hostels Leisure parks Other
Brussels (B.)
Bruges (Fl.)
Antwerp (Fl.)
Ghent (Fl.)
Ostend (Fl.)
Machelen (Fl.)
Saint-Gilles (B.)
Saint-Josse-t.-N. (B.)
Koksijde (Fl.)
De Haan (Fl.)
B.: BrusselsFl.: Flanders
2.10
2.15
2.20
2.25
2.30
2.35
2.40
2.45
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
2011 2012 2013 2014 2015 2016
Overnight stays Arrivals Avg nights/arrival (RHS)
7Cushman & Wakefield | Marketbeat Belgian Hotels H1 2017
BRUSSELS
Figure 12
Evolution of the average daily rate in Brussels, EUR
Source: visit.brussels
DEMAND
Recovery underway.
Following several years of increases, the average
occupation rate on the Brussels hotel market suffered as a
result of the Paris and Brussels terrorist attacks. In 2016,
the 12-month rolling average having slipped to a trough
rate of 70% in October (Figure 11). Based on this curve it
transpires that Brussels is on the path to recovery. Indeed
according the Brussels Hotel Association, the occupation
rate at the New Year 2016-2017 was 85% against 64% a
year previous. By June 2017, the occupation rate was at
75.00% against in 66.30% June 2016 and a benchmark
rate of 85.80% in 2015.
Brussels tourism body, visit.brussels intends to push
overnight stays back to its 2014 level of 7 million in 2017,
before increasing this number to 10 million in 2020. It aims
to achieve these numbers by boosting Brussels' image
through international promotional campaigns, attending
trade fairs as well as leveraging events such as sporting
and cultural events.
Hotel operators have not made significant changes to
pricing levels on the back of the attacks with only a slight
decrease of the ADR. By June 2017, the average rate was
EUR 114/night against EUR 111 in June 2016 and EUR
120 in June 2015 (a peak level for this month over the past
decade) (Figure 12). Rates varied between EUR 95/night
for three-star hotels and EUR 161/night for five-star hotels
in June.
The RevPAR for 2016 averaged EUR 65 in 2016 having
decreased by more than 15% as a result of the reduced
occupation rate. The RevPAR over the first half of 2017
increased to EUR 75 as occupation is on the road to
recovery (Figure 13).
Figure 11
Evolution of the average occupancy rate in
Brussels
Source: visit.brussels
Figure 13
Evolution of the RevPAR in Brussels, EUR
Source: visit.brussels
60
80
100
120
140
Jan
-13
Ap
r
Jul
Oct
Jan
-14
Ap
r
Jul
Oct
Jan
-15
Ap
r
Jul
Oct
Jan
-16
Ap
r
Jul
Oct
Jan
-17
Ap
r
Average rate 12-month moving avg rate
20
40
60
80
100
120
Jan
-13
Ap
r
Jul
Oct
Jan
-14
Ap
r
Jul
Oct
Jan
-15
Ap
r
Jul
Oct
Jan
-16
Ap
r
Jul
Oct
Jan
-17
Ap
r
RevPAR 12-month moving avg rate
Bru
ssels
attacks
Paris a
ttacks
50%
55%
60%
65%
70%
75%
80%
85%
90%
Jan
-13
Ap
r
Jul
Oct
Jan
-14
Ap
r
Jul
Oct
Jan
-15
Ap
r
Jul
Oct
Jan
-16
Ap
r
Jul
Oct
Jan
-17
Ap
r
Average occupancy rate 12-month moving avg rate
Bru
ssels
attacks
Paris a
ttacks
8Cushman & Wakefield | Marketbeat Belgian Hotels H1 2017
INVESTMENT MARKET
Specialised international investors are
prominent.
The total volume invested in Belgian hotels amounted to
EUR 136 million in H1 2017 compared to EUR 155 million
(communicated) in H1 2016 (Figure 14). Nevertheless, the
real total in 2016 was much higher due to the fact that
acquisition prices remained undisclosed on half of the 10
deals which were then recorded. In H1 this year, three
deals took place over the first six months, with all prices
disclosed.
The largest deal in H1 was the acquisition of a nine-hotel
(including one in France), 1,120 room portfolio by
Canadian hospitality management company Westmont
Hospitality Group. The portfolio is worth EUR 70-95 million
and includes establishments in Antwerp, Brussels and
Liège.
The second largest purchase was carried out by Pandox
who paid EUR 32.7 million for the five-star Hotel Silken
Berlaymont (more than 212 rooms). The new owners plan
to invest EUR 3.5 million to upgrade the premises.
Finally, one of Brussels’ landmark hotels, the former
Sheraton (Place Rogier) was bought by specialised hotel
investor PrimeCity Investment for EUR 28 million. This
follows the bankruptcy of the 500-room establishment in
December 2016. Primecity Investment will lease the
premises to an operator following substantial works which
could be delivered in several stages starting from 2018.
All three investments in H1 involved foreign capital (from
Canada, Sweden and Cyprus in the case of PrimeCity
Investment) (Figure 15) and players specialised in the
hotel segment. Indeed a glance at past years reveals
Belgian investors have accounted for 8-9% of the total
invested volume.
Figure 14
Invested volumes in Belgian hotels, EUR millions
Source: RCA, Cushman & Wakefield
Figure 15
Investment distribution by nationality
Source: RCA, Cushman & Wakefield
0
50
100
150
200
250
300
350
2013 2014 2015 2016 H1 2017
0%
20%
40%
60%
80%
100%
2013 2014 2015 2016 H1 2017
Belgium Other Middle East FranceUnited States Germany Asia
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