Growing early planning project counts and increased NPAs drive Europe’s Hotel construction pipeline at the Q1 close

According to the latest Europe Hotel Construction Pipeline Trend Report from Lodging Econometrics (LE), analysts at LE report that at the close of the first quarter, the country’s hotel construction pipeline stands at 1,776 projects/266,901 rooms.

Projects under construction stand at 814 projects/125,657 rooms, while projects scheduled to start construction in the next 12 months account for 419 projects/62,625 rooms. Projects in the early planning stage have hit a record high 543 projects with 78,619 rooms, up 17% by projects and 12% by rooms year-over-year (YOY). New project announcements experienced a healthy increase in Q1, to close the quarter at 203 projects/26,740 rooms. Construction starts were also up over the last four quarters, in Q1, with 126 projects/17,163 rooms.

Travel activity to popular European tourist destinations was steady in the first quarter. Lodging demand and increased occupancy can be expected to continue as the region gets ready to host several upcoming major events, including the Spanish Grand Prix, French Open, Monaco Grand Prix, Tour de France, Wimbledon, UEFA Champions League Final, and the upcoming Summer 2024 in Paris and the Winter 2026 Olympics in Milan and Cortina d’Ampezzo. Demand has motivated developers to move forward with plans as evidenced by the rise in projects in early planning and new project announcements.

The top countries in the Europe Construction Pipeline by project count are led by the United Kingdom with 340 projects/47,551 rooms, Germany with 238 projects/40,368 rooms, and France with 139 projects/15,889 rooms. Next, is Portugal with 130 projects/15,419 rooms, and Turkey with all-time highs of 108 projects/15,862 rooms. These five countries account for 54% of projects and 51% of rooms in the region’s total pipeline at Q1.

Cities in Europe with the largest pipelines by project count are London with 90 projects/15,393 rooms, Istanbul with a record 42 projects/7,360 rooms, and Dusseldorf with 38 projects/7,080 rooms. Next is Lisbon with 35 projects/4,073 rooms, followed by Dublin with 31 projects/5,873 rooms.

The top hotel franchise companies in Europe’s construction pipeline at the Q1 close are Accor with 277 projects/36,964 rooms, Hilton Worldwide with 202 projects/28,769 rooms, and Marriott International with 185 projects/28,722 rooms. InterContinental Hotels Group (IHG) follows with 148 projects/20,174 rooms, and Radisson Hotel Group with 49 projects/10,018 rooms. Combined, the companies account for 48% of projects and 47% of rooms in the total pipeline. 

The leading brands for each of these franchise companies at Q1 are Accor’s Ibis brands with 94 projects/11,137 rooms, Hilton’s Hampton brands with 73 projects/10,590 rooms, Marriott’s Moxy brand with 41 projects/6,700 rooms, IHG’s Holiday Inn Express with 52 projects/7,090 rooms, and Radisson Red with 11 projects/2,256 rooms.

The LE forecast for new hotel openings continues to rise in 2023, with 452 new hotel projects/62,519 rooms anticipated to open by year-end. LE analysts forecast another 409 new hotel projects/56,632 rooms to open by year-end 2024.