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HVS study says such developments continue to offer safer, faster returns for investors
Budget hotels are expected to continue dominating the European development scene in the coming months, a new report by HVS concludes. The lower building costs, shorter development and market penetration time and the fact that financial backers see a safer and faster return on their investment mean that developers and operators are finding it easier to attract funding for budget hotels, the hospitality consulting firm found.
HVS' research, conducted in conjunction with construction consultancy Davis Langdon, shows that business travel across the European hotel sector is recovering and many midscale and upscale hotels have registered double-figure RevPAR growth. However, that growth has been mainly driven by occupancy rather than average rates, showing that the economic recovery is still fragile and business and leisure travelers remain price-sensitive.
“Hotel operators have embraced the opportunities of the current market focusing on optimizing their budget brands and developing new concepts that are viable solutions and match the priorities and tastes of modern hotel guests,” said report co-author Ana Campos-Blanco, an associate at HVS' London office.
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