Press release HOSTA 2017

Press release HOSTA 2017

Date: 13. September 2017

HOSTA 2017 report

Profits hotel market approaching record highs

The Dutch hotel market is showing better results than ever. This is evident from the HOSTA 2017 report from consultancy firm Horwath HTL. Both the occupancy rate of the Dutch hotels and the average room rate have risen. As a result, total revenue per hotel room increased by 7%. Because the profit percentage increased from 35% to 40%, the profit per hotel room increased by almost 20%. Expressed in Euros per hotel room, the profit is therefore at the highest level in 40 years.

Higher turnover and profit
The study was conducted by Horwath HTL among more than 400 Dutch three, four and five star hotels. The research shows that the average occupancy rate in the Netherlands increased in 2016 from 71.4% to 73.9%. This puts the occupancy rate at the highest level since the peak year 2000. The occupancy rate in the Netherlands has now risen for the fourth year in a row.

The average room rate rose by 5% in 2016, from € 102 to € 107. After the previous increases in 2014 and 2015, the room rate is now at the highest level since 2007.

The total turnover in Dutch hotels increased by 7% in 2016, to € 138 per hotel room per day. Gross operating profits, expressed as a percentage of sales,  increased from 35.1% to 40.0%. Expressed per available room, profits rose by almost 20% to € 55. In the last 40 years, this level has only been achieved once before, in the peak year 2000.

Expectations for 2017 show further growth in the Dutch hotel market. The occupancy rate is expected to rise to around 76%. The expectations for 2018 are also positive: the occupancy rate may then rise to 77%. The average room rate is also expected to continue to grow, to € 110 in 2017 and € 111 in 2018.

Hotel market in Amsterdam
In the Amsterdam & Schiphol region, the average occupancy rate also rose from 80.8% to 82.2% in the past year. However, the average room rate rose by more than 5% from € 124 to € 131. Both the occupancy rates and the average room rates are considerably higher in Amsterdam than in the rest of the Netherlands. However, the results outside the metropolitan region are increasing rapidly: the occupancy rate in the rest of the Netherlands rose from 65.1% to 68.4%, while the average room rate rose from € 83 to € 88.

The outlook for the Amsterdam & Schiphol region is also cautiously optimistic. The occupancy rate is expected to continue rising to 83.7% in 2017, but is expected to stabilize in 2018. The average room rate is expected to continue to rise to € 137 in 2017 and € 141 in 2018.

40 years of the Dutch hotel market.
The HOSTA report by Horwath HTL will be published for the 40th time this year. Because this research has been conducted in the same way for 40 years, a unique picture has emerged of developments in the Dutch hotel market since 1977. The occupancy rate of Dutch hotels was 72% in 1977 and 74% in 2017. In the past 40 years however, there have been major peaks and troughs. In 1993, as a result of the Gulf War, the occupancy rate fell to a low of 58%. In 1998, on the strength of global economic growth, a record occupancy of 78% was achieved.

The average room rate showed an almost continuous increase for 30 years, from € 35 in 1977 to € 110 in 2007. However, under the pressure of the credit crisis, the room rate plummeted to € 93 in 2009. Despite the increases over the past 3 years, 2007 level has not been reached since. However, it is expected that the highest average room rate ever will be matched in 2017, and can be passed in 2018.

Between 1977 and 2017, the number of hotels in the Netherlands only increased slightly, from 3,500 to 3,600. In the first 20 years there was even a decrease. The hotels did get bigger and bigger, so the number of hotel rooms increased by 138% in the same period, from 52,000 rooms to 124,000 rooms.

The expansion of the hotel market is not without tensions, especially in a tight housing market. In 1983 the planned arrival of a Holiday Inn hotel in Amsterdam led to protests and riots: eventually 1,500 squatters had to be evacuated. A few years later the hotel could still be opened; in 2017 this is the renovated Kimpton De Witt hotel. After the municipality of Amsterdam added more than 9,000 hotel rooms between 2007 and 2015, a hotel stop was announced. However, because some projects are already licensed, and other locations already have a hotel destination, this hotel stop does not immediately lead to an end to hotel developments in Amsterdam. This has led to incomprehension among the Amsterdam population. In 2015, the plan to convert the Bungehuis into a hotel again led to protests and riots; just like in 1983 the building had to be evacuated by the police. The arrival of the hotel is now very uncertain; the case is expected to come before the Council of State next year.