demo version - forecasts

Hotel forecasts 2015-2016 / The Netherlands

MKG Hospitality Paris - London - Berlin - Nicosia

2015 Edition

www.mkg-group.com 1

TABLE OF CONTENTS 1. Characteristics of the hotel supply in the Netherlands 2 2. Hotel performance indicators for 2015 and 2016 3 2.1. Recent results for corporate chain hotels 3 2.1.1. Performance indicators in 2013 (Average daily rates and RevPAR in euros not incl. taxes) 3 2.1.2. Monthly changes in occupancy rates, average daily rates and RevPARs by category from January

2009 to October 2014 3 2.2. Forecasts 2015 and 2016 5 3. Focus on Amsterdam 7 3.1. Change in the hotel supply 7 3.2. Amsterdam forecasts (Average daily rates and RevPAR in Euros not incl. taxes) 7



2015 Edition

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1. Characteristics of the hotel supply in the Netherlands

The Netherlands’ supply is developing quickly thanks to corporate chains: 4,550 additional rooms were created between 2009 and 2014.

The Netherlands is the European country where corporate chains are the most developed with respect to the global hotel supply: they represent close to 66% of the global supply in 2014.

Recent growth of the supply has been mostly driven by the mid- and upscale categories. Generally speaking, the hotel supply is rising in range.

Change in the global supply

2009 2014 Change 2014/2009

Hotels Rooms Hotels Rooms Rooms %

Budget 371 5,511 328 4,550 -961 -17.4%

Economy 596 12,983 524 10,694 -2 289 -17.6%

Midscale 1,025 50,146 1,073 50,843 697 1.4%

Upscale 189 18,910 239 26,014 7,104 37.6%

Total 2,181 87,550 2,164 92,101 4,551 5.2%

Breakdown of the global supply by category

SE : budget, E : economy, M : midscale,

U&L : upscale and luxury

Change in the corporate chain supply

2008 2013 Evolution 2013/2008


Budget 44 310 64 656 346 111.6%

Economy 44 4,559 40 4,436 -123 -2.7%

Midscale 299 28,817 330 32,708 3,891 13.5%

Upscale 80 14,511 171 22,918 8,407 57.9%

Total 427 48,197 547 60,718 12,521 26.0%

Breakdown of the corporate chain supply by category



Market share of corporate chains

Penetration rate 2009 Penetration rate 2014 European average

Budget 5.6% 14.4% 24.2%

Economy 35.1% 41.5% 19.7%

Midscale 57.5% 64.3% 25.8%

Upscale 76.7% 88.1% 37.5%

Total 55.1% 65.9% 28.1%

Série1; …

Série1; …Série1; …

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SE

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E

Hotel supply shows strong growth



2015 Edition

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2. Hotel performance indicators for 2015 and 2016

2.1. Recent results for corporate chain hotels

2.1.1. Performance indicators in 2013 (Average daily rates and RevPAR in euros not incl. taxes)

The hotel sector in the Netherlands is marked by important variations in performance as it is very sensitive to the economic environment resulting from the country’s high international exposure.

After a downturn in occupancy rates in 2008 and especially in 2009, these bounced back in 2010 and 2011. However, levels reached still remain decidedly lower than in the pre-crisis period (higher than 71% in 2006 and 2007). The recovery in ADR is stronger in the upscale segment from 2010, whereas the economy and midscale segments waited until 2011 to increase their prices more significantly.

The slump in economic activity in Europe and the Netherlands once again weighs on occupancy rates in 2012. Average daily rates, which are sensitive to the economic situation, are also keeping in step. The economy and midscale categories are the most affected. 2013 is the beginning of the recovery. While average daily rates continue their downtrend on the economy and midscale segments, occupancy rates increase more significantly except in the midscale category.

Annual hotel performance indicators in 2013 (average daily rates and RevPAR in Euros not incl. taxes)

Occ. rate

2013 Change Pts

Average daily rates 2013

Change % RevPAR 2013 Change %

Economy 71.0% 2.3 72.8 -2.6% 51.7 0.7%

Midscale 65.4% 0.3 81.7 -3.6% 53.5 -3.2%

Upscale 70.5% 1.7 128.4 1.3% 90.5 3.9%

Total 67.8% 1.1 99.0 -1.0% 67.1 0.5%

2.1.2. Monthly changes in occupancy rates, average daily rates and RevPARs by category from January 2009 to October 2014

During the crisis in 2012, the economy segment shows the first signs of a

turnaround followed by the midscale segment. On the beginning of 2013, average daily rates remain on a downtrend in all categories except the upscale segment.

In 2013, performances bounced back in the second semester and continue in 2014. Growth in the performances, particularly in occupancy rates, is slower in the second semester of 2014 due to a comparison with the previous year, as the beginning of the recovery started in mid-2013. The upscale category shows an increase in ADR whereas economy and midscale prices do not record any rise in 2014.

Monthly history across all categories

Source: MKG Hospitality Database

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OR change ADR change RevPAR change

High sensitivity to the economic situation

Improved performance continues in 2014



2015 Edition

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History of monthly performance on the economy segment


History of monthly performance on the midscale segment


History of monthly performance on the upscale segment


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2015 Edition

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2.2. Forecasts 2015 and 2016

Being particularly sensitive to the international economic situation, results improved in 2011 thanks to strong international demand.

2012 and 2013 are characterized by a downturn in investments and in household consumption due to restrictive policies to restore the budgetary balance.

2 The trend shows the reversal of the downward trend: the Netherlands record growth in the GDP similar to the Euro Zone’s. This growth is mainly driven by international demand, which is expected to continue to rise in the two next years. Companies support economic recovery by increasing investments after two years of contraction. However household consumption remains subdued notably due to a growing unemployment rate, and should rise again only from 2015. Growth in the RevPAR expected in 2014 is made possible by the rise in occupancy rates and the beginning of the recovery in prices, and should get stronger in 2015. The context of a country’s economic recovery and an increase in domestic demand (from both business investment and household consumption perspectives) could allow average prices to rise again, notably in economy and midscale categories.

Economic forecasts

2011 2012 2013 2014 2015 (f) 2016 (f)

EU OECD EU OECD

Growth in the GDP 1.7% -1.6% -0.7% 0.9% 1.4% 1.4% 1.7% 1.6%

Household consumption 0.2% -1.4% -1.6% 0% 1.1% 0.4% 1.7% 0.4%

GFCF 5.6% -6% -4% 2.1% 3.3% 3.5% 4.3% 4.5%

Exports 4.4% 3.3% 2% 3.4% 3.3% 4%-- 4.6% 3.8%

Unemployment rate 4.4% 5.3% 6.7% 6.9% 6.8% ------ 6.7% ------

Growth in GDP in the Euro Zone

1.6% -0.7% -0.5% 0.8% 1.1% 1.1% 1.7% 1.7%

Source : European Economic Forecast Autumn 2014, OECD Economic Outlook 94, Projection, November 2014

Changes in the RevPAR and GDP, observed from 2000 to 2014 and forecasted for 2015 and 2016 in the Netherlands

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GDP variationRevPAR variation

RevPAR GDP

A recovery in investment and international demand



2015 Edition

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Forecasts across all categories

YTD

10/2014

2014 2015 2016

Low hypothesis

Intermedia-te scenario

High hypothesis

Low hypothesis


High hypothesis

Low hypothesis


High hypothesis

Occupancy rate

71.9% 70.5% 70.5% 70.6% 72.4% 72.9% 73.4% 74.4% 75.4% 76.4%

Change in point

2.2 2.0 2.1 2.1 1.8 2.3 2.8 1.6 2.6 3.6

Average Daily Rate

101.4 101.1 101.2 101.3 101.4 102.1 102.9 103.0 103.8 104.6

Change in % 0.3% 0.3% 0.4% 0.5% 0.1% 0.9% 1.6% 0.9% 1.7% 2.4%

RevPAR 72.9 71.3 71.4 71.5 73.3 74.4 75.5 76.7 78.3 79.9

Change in % 3.4% 3.3% 3.5% 3.7% 2.7% 4.2% 5.7% 3.1% 5.2% 7.4%

Forecasts for the economy category

YTD

10/2014

2014 2015 2016

Low hypothesis


High hypothesis

Low hypothesis


High hypothesis

Low hypothesis


High hypothesis

Occupancy rate

77.1% 74.0% 74.0% 74.1% 76.0% 76.5% 77.0% 77.0% 78.0% 79.0%

Change in point

3.6 3.0 3.0 3.1 2.0 2.5 3.0 0.5 1.5 2.5

Average Daily Rate

74.2 73.1 73.2 73.3 74.8 75.4 76.0 76.3 76.9 77.5

Change in % 0.2% 0.4% 0.5% 0.6% 2.2% 3.0% 3.8% 1.2% 2.0% 2.8%

RevPAR 57.2 54.1 54.2 54.3 56.9 57.7 58.5 58.8 60.0 61.2

Change in % 5.1% 4.6% 4.7% 4.9% 5.0% 6.5% 8.0% 1.9% 4.0% 6.1%

Forecasts for the midscale category

YTD

10/2014

2014 2015 2016

Low hypothesis


High hypothesis

Low hypothesis


High hypothesis

Low hypothesis


High hypothesis

Occupancy rate

68.9% 67.8% 67.8% 67.9% 69.8% 70.3% 70.8% 72.3% 73.3% 74.3%

Change in point

2.3 2.4 2.4 2.5 2.0 2.5 3.0 2.0 3.0 4.0

Average Daily Rate

82.7 80.6 80.6 80.7 80.4 81.0 81.7 81.2 81.9 82.5

Change in % -1.5% -1.4% -1.3% -1.2% -0.3% 0.5% 1.3% 0.2% 1.0% 1.8%

RevPAR 57.0 54.6 54.7 54.8 56.2 57.0 57.8 58.8 60.0 61.3

Change in % 2.0% 2.1% 2.3% 2.5% 2.7% 4.2% 5.7% 3.1% 5.3% 7.5%

Forecasts for the upscale and luxury category

YTD

10/2014

2014 2015 2016

Low hypothesis


High hypothesis

Low hypothesis


High hypothesis

Low hypothesis


High hypothesis

Occupancy rate

72.8% 71.8% 71.8% 71.9% 73.5% 74.0% 74.5% 75.5% 76.5% 77.5%

Change in point

1.4 1.3 1.3 1.4 1.7 2.2 2.7 1.5 2.5 3.5

Average Daily Rate

127.3 130.8 131.0 131.1 131.0 132.0 133.0 133.6 134.7 135.7

Change in % 1.7% 1.9% 2.0% 2.1% 0.0% 0.8% 1.6% 1.2% 2.0% 2.8%

RevPAR 92.7 93.9 94.1 94.2 96.3 97.7 99.1 100.9 103.0 105.2

Change in % 3.7% 3.7% 3.9% 4.1% 2.4% 3.9% 5.4% 3.3% 5.4% 7.6%



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3. Focus on Amsterdam

3.1. Change in the hotel supply

We may observe growth in the global supply by more than 5,500 rooms in Amsterdam across 5 years, primarily driven by corporate chains. These represent close to 85% of the hotel supply in 2013.

Change in the global supply

2009 2014 Evolution 2014/2009


Global including: 286 18,021 333 25,038 7,017 38.9%

Corporate chains 65 11,932 117 21,764 9,832 82.4%

Independent 221 6,089 216 3,274 -2,815 -46.2%

Breakdown by category of the corporate chain supply



3.2. Amsterdam forecasts (Average daily rates and RevPAR in Euros not incl. taxes)

Amsterdam suffered in 2012 from a drop in occupancy rates due to important growth in the supply (+19.4% in 2012), which also led to stronger competition and a drop in average daily rates.

This trend continued in 2013 as the stabilization of occupancy rates was not compensated by the drop in average daily rates. The situation improved in the second semester 2013 and then in 2014 thanks to an increased tourist appeal of the city (reopening of the Rijksmuseum and the Van Gogh Museum in 2013) which make the arrivals increase. Average prices increase significantly in 2014 and this trend could continue in 2015, driving growth in the RevPAR.

Forecasts for all categories

YTD 10/2014

2014 2015 2016

2013 Low hypothesis


High hypothesis

Low hypothesis


High hypothesis

Low hypothesis


High hypothesis

Occupancy rate

77.9% 80.6% 79.4% 79.9% 80.4% 80.9% 81.9% 82.9% 83.4% 84.4% 85.4%

Change in point

2.8 2.0 1.5 2.0 2.5 1.0 2.0 3.0 1.5 2.5 3.5

Average Daily Rate

116.2 116.8 117.0 117.9 118.7 120.3 121.2 122.1 125.1 126.1 127.0

Change in % -0.1% 1.1% 0.6% 1.4% 2.2% 2.1% 2.9% 3.6% 3.2% 4.0% 4.8%

RevPAR 90.6 94.1 92.9 94.2 95.5 97.3 99.3 101.3 104.4 106.4 108.5

Change in % 3.6% 3.7% 2.5% 4.0% 5.4% 3.4% 5.4% 7.5% 5.1% 7.2% 9.3%

Série1; B…

Série1; E…Série1; M…

Série1; U…

B

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M

U&L

The reopening of major tourist venues and international demand helps bring back growth

Corporate chains dominate the market

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