Press Release: Jones Lang LaSalle Hotels
December 10, 2001
LONDON -- Brussels’ hotels have performed better than many other European cities in the wake of the fallout in
global travel following the events of September 11th.
The Brussels hotel market has been one of the least affected European hotel markets, with room rates holding up
to date. Occupancy rates, similar to most markets have fallen during the months of September and October as non-essential
travel was cut and leisure demand cancelled across the world. The month of September saw occupancy levels in quality
hotels fall by 11.8% to 76.1%, whilst October saw a further slide of 14.7% to 66.7%. By comparison Paris, Rome,
Milan, London, Budapest and Berlin all saw falls in excess of 20%.
Despite this, Richard Eaton-Hart, Senior Vice President at Jones Lang LaSalle Hotels, points to the stability in
hotel room rates compared to other major European cities which are witnessing up to a 15% fall in average rate.
Quality hotel room rates in Brussels fell by only 0.8% to €130.41 during the month of September. Again the drop
in October was limited to 0.5% to €118. He attributes this to Brussels’ lesser reliance on the US sector. “Quality
hotels in Brussels source only around 15% of total demand from the US market, compared to 45% in London, 35% in
Paris and Rome and 24% in Amsterdam. Thus the city has not taken such a hit from one individual market”.
Instead the bulk of hotel demand is sourced from corporate and EU related demand from a wide range of European
countries. “Whilst travel in the days immediately following the events of September 11th halted, business travel
has resumed over the past seven weeks. Of course there are concerns about the economic situation across the EU
and both the business and conference sectors are likely to be subject to cost cuts. However, Brussels has not felt
the double impact of a slowdown in US business and leisure travel, due to its limited exposure” added Mr Eaton-Hart.
In addition, 2000 was a particularly strong year for Brussels’ hotels. The city played host to the European Football
Championships in June 2000 which served to boost occupancies and thus the falls in occupancy may be exaggerated
somewhat. The city’s convention centre had a strong book
of business in 2000, which was expected to slow somewhat in 2001 due to the cyclical nature of large conferences
and meetings.
Brussels’ performance is in stark contrast to Europe’s gateway cities of London and Milan which saw a 37% and 32%
fall in RevPar (luxury hotels) during the month of October. Other markets to see significant falls in the wake
of the terrorist attacks were Rome, Munich, Amsterdam, Budapest, Berlin and Dublin.
2001 has seen strong investor interest in the Brussels market with several deals concluding. In April Deutsche
Immobilien Fonds AG (DIFA) purchased the five star, 281 room Radisson SAS for €85m, representing the fund’s first
hotel acquisition outside of Germany. This was followed by Hoteles Catalonia’s purchase of the 78 room Hotel Forum
Art for €6.6m (including an amount for renovation costs). In June Bannimo Real Estate sold the 262 room Swissotel
to the Belgian company City Hotels SA for around €40m.
“Looking forward, whilst EU related business is likely to remain strong, the performance of Brussels’ hotels may
come under increasing pressure given the current weakness of the convention and conference market, which accounts
for a significant amount of room night demand, as well as the current uncertain economic climate. Non-essential
travel has already been cut and budgets are being set for next year in the context of the current economic uncertainty”
concluded Mr Eaton-Hart.
Jones Lang LaSalle Hotels, the world’s leading hotel investment services group, provides clients with value-added
investment opportunities and advice. Its recent two-year success story includes the sale of 13,994 hotel rooms
to the value of US$1.4 billion in 48 cities and advisory expertise for 173,021 rooms to the value of US$32.6 billion
across 343 cities. Jones Lang LaSalle Hotels’ services include transactions, mergers and acquisitions, financial
advice and capital raising, valuation and appraisal, asset management, strategic planning, operator assessment
and selection and industry research. Jones Lang LaSalle (NYSE: JLL) is the world’s leading real estate services
and investment management firm, operating across more than 100 key markets on five continents.
http://www.joneslanglasallehotels.com/
SOURCE: Jones Lang LaSalle Hotels (NY)