Press release HOSTA 2018: Record profits for Dutch hotels

Press release HOSTA 2018: Record profits for Dutch hotels

Date: 11. September 2018

Hotels in the Netherlands are doing extremely well. Occupancy rates are at the highest level in 20 years, and the average room rates are approaching record highs. As a result, the profit per hotel room is higher than ever.

Highest occupancy in 20 years; highest profits ever
The average occupancy in hotels in the Netherlands has increased from 73.9% in 2016 to 77.2% in 2017. Only in 1997 was the occupancy higher. In 2018, the occupancy is expected to reach 78.7%, an absolute record.

The average room rates increased last year from € 107 to € 112, an increase of almost 5%. Compared to the last crisis year for the hotel industry, 2009, the increase in rates is over 20%. However, the rates are still below the level of 2002, two crises ago, when a record rate of €114 was achieved. In 2018, it is expected this record will be broken when the average room rates reach € 116.

As a result of the high occupancies and room rates, the average revenues of hotels in the Netherlands increased by 6%. In total, a hotel room in the Netherlands in 2017 generated revenues of € 146 per day. This includes revenues from restaurants, meeting rooms, wellness and other facilities.

The operating costs for hotels have increased as well, but at a lower rate than the revenues. The profit margin increased from 40.0% in 2016 to 40.5% in 2017. Per hotel room per day, the average profit for the hotel operator was € 59 in 2017. This is the highest average profit per available room ever achieved in the Dutch hotel industry.

Hotel managers expect further growth
The research was carried out by Horwath HTL among over 400 three, four and five star hotels in the Netherlands. Of the hotel managers, 58% expect the occupancies to increase in 2018, while 19% expect a decrease. For the average room rates, 89% expect an increase and only 7% a decrease. For 2019, 48% of hotel managers expect another increase, while 45% expect a stabilisation and only 7% expect a decrease. Likewise, 88% of hotel managers expect the average room rates will continue to increase in 2019.

The average occupancy is expected to reach 78.7% in 2018, while the average room rates are expected to increase by 4% to € 116. For 2019, the projections are more cautious, with a slight increase or stabilisation of the occupancy and an increase in average room rates of 3%.

Hotels in Amsterdam are reaching maximum occupancy
In the Amsterdam & Schiphol area, the occupancies increased from 82.2% to 85.1. The average room rates increased by over 5% from € 131 to € 139. Both the occupancies and the average room rates in Amsterdam are considerably higher than in the rest of the country.

In the Amsterdam city centre, occupancies for many hotels are well above 90%, making a further increase almost impossible. The projections for the occupancy in the Amsterdam region therefore include a very slight increase in 2018 and a stabilisation in 2019, remaining below 86%. The average room rates are still expected to increase further, from € 144 in 2018 to € 146 in 2019.

The high occupancies in Amsterdam are good for the hotels, but the increasing numbers of tourists can also create a nuisance. The municipality of Amsterdam has announced a hotel moratorium, which in time will make new hotel developments in the city and particularly in the city centre almost impossible. The measure will likely result in continued record highs for the occupancies, and further increases for the average room rates. For the next few years a total of 4,000 new hotel rooms are in the pipeline for Amsterdam, but these are almost all outside the city centre.

HOSTA 2018
The HOSTA 2018 report is published by consulting firm Horwath HTL. THe report shows the results of the hotel industry in the Netherlands, Belgium and Luxembourg. A total of 500 three, four and five star hotels participated in the Benelux.

The HOSTA 2018 report was presented during the Horwath HTL Hotel Event whcih took place on 11 September 2018 in ABN AMRO’s Circl Pavillion.