Hotel Performance

In European Cities

As the global population becomes increasingly affluent and connectivity continues to improve, travel becomes more accessible to a wider range of people. The latest data show there were 1.3 billion international travellers in 2017, and around half of these travelled to Europe. France and Spain are the two most visited worldwide destinations, closely followed by China and the US.

The European cities of Paris, London, Amsterdam and Rome remain popular destinations. These cities are easily accessible and known for their rich culture and heritage. They appeal to travellers from emerging economies, who consider visiting them to be status-enhancing.

London Heathrow, Paris Charles de Gaulle and Amsterdam Schiphol are the busiest airports across Europe in terms of passenger numbers. To accommodate the growing demand for travel, Charles de Gaulle and Schiphol airports are expanding with new terminals due to open in 2025 and 2023 respectively. London remains the best-connected city with six international airports.

Given their popularity, it is not surprising that Paris, London, Rome, Milan and Lisbon are featured in the top eight most expensive hotel rates.

Research from CBRE shows that residential properties in London situated close to a hotel achieve an 85% premium. We focused our analysis on central London, and included the historic luxury hotels including Claridge’s, the Dorchester and The Ritz. The average prices of properties within 500 meters of hotels was £3.2 million, more than double the borough average of £1.68 million.

But you don’t just have to live near a hotel. There is also an increasing trend for luxury serviced apartments within or linked with prestigious hotel brands, known as branded residences. There are now around 400 of this type of development worldwide. Half of all branded residences are in the US, with Ritz Carlton and Four Seasons dominating the trend.

This trend has also been adopted by London developers, and branded residences have multiplied in the capital over the last few years. The current crop of branded residences in London includes: One Hyde Park, One Nine Elms, Bulgari Residences, 20 Grosvenor Square, Corinthia Residences
and 10 Trinity Square.

It is easy to understand why residential branding is gaining popularity: it promises the elusive win-win. For the developer, units in branded residences command significant premiums over comparative unbranded properties and, for the buyer, they offer quality, luxury and service. The most prestigious hotel brands offer the greatest cachet for their residents, and attract the highest premiums.

Branded serviced residences offer something significantly more valuable and elusive than having all your needs taken care of, they offer a sense of identity. Purchasing and living in a hotel branded residence allows an individual to reinforce, both to themselves and to others, that they are the ‘sort of person’ that lives in a five-star hotel. The premium for this type of home varies depending on the hotel brand and amenities offered, but is generally in the region of 30%.