Robust growth in Amsterdam hotels post ban on new developments

Published on : Thursday, July 11, 2019

In the past 10 years the international and domestic visitation to Amsterdam has grown by nearly 7%  and in 2018 hotels in the Dutch capital saw robust growth with RevPAR (rooms revenue per available rooms) up by 4%.

 

 

The ban on new hotel developments imposed in the city centre and increase in demand led to a strong year-on-year growth largely driven by a substantial uplift in average daily rates

 

This strong year-on-year growth has been largely driven by a substantial uplift in average daily rates fuelled by the ban on new hotel developments imposed in the city centre, as well as an increase in demand.

 

 

According to Mattia Cavenati, an analyst with HVS the dual impact of the two factors means that the hotel will be able to increase their average rates without sacrificing their occupancy.

 

 

After  the 2009 economic crisis hotels in Amsterdam have crossed the difficulties they faced but other cities are still recovering or playing catch-up.

 

In 2015 until the ban on further hotel development in the city’s Canal District was imposed, hotel supply in Amsterdam increased at an average of 4.2% a year since 2011.

 

 

The ban planned projects had moved to more fringe areas until further restrictions were imposed in 2016 when the hotel development was only permitted in designated areas.

 

In 2018 the city had 500 hotels with around 35,000 room , four-star properties make up the  largest number of rooms. A majority of Amsterdam’s hotels operate in the two-star and independent bracket where less than 4% were five-star properties.

 

 

Cavenati added that the ban on development had an impact on the hotel pipeline intending that they had higher barriers to entry.

 

 

In Amsterdam the transitions remained strong and prices per room were relatively high. This made the city acquire the top 10 of the HVS European Hotel Valuation Index.

 

Report co-author Sophie Perret, director, HVS said that as an investment market Amsterdam is one of the most liquid and most attractive in Europe.

 

 

There was a substantial movement in hotel stock in the city last year and in the year to June 2019 transactions look unlikely to slow down. The strong appeal of Amsterdam is set to remain solid for some time to come.

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