Hotel operators are increasingly attracted to second-tier locations, according to the latest analysis from Cushman & Wakefield. Ghent (46%), Leipzig (26%), Erzurum (25%) and Dresden (23%) are the regional cities that have risen in attractiveness the most amongst hotel operators since 2021.
The findings form part of a survey of around 200 senior executives of leading hotel operators active in Europe. The surveys were conducted in 2023 across nine different markets.
The surveyed operators represent more than 9,700 hotels with >1,225,000 rooms already operating in Europe, with an additional 1,600 proposed hotels in the pipeline.
Although capital cities throughout Europe remain the most attractive locations for operators, the survey finds that operators are increasingly looking at other cities considered less popular or mainstream due to a variety of reasons.
As a ski resort, Ezrurum is benefitting from a general growth of leisure demand and an interest from travellers wanting to discover new places, and Ghent is establishing a reputation for unique architecture and cultural scene.
This is coupled with a higher concentration in the major hotspots, encouraging international brands to expand into other cities. Meanwhile, other regional cities are helping fuel the expansion of newer midscale and economy brands, given they are less suitable for “big box” full-service hotels and can cater to smaller schemes.
The report also shows the growing importance hotel operators place on ESG. For lease structures, nearly 60% of operators show a willingness to offer higher rents, increasing significantly from 2021.
Additionally, over half of operators (53%) identified a growing trend of including a clause requiring reporting ESG KPIs in their contracts. 37% of survey respondents reported an increasing trend of carbon footprint targets clauses and 32% reported the inclusion of a clause requiring minimum energy efficiency for new FF&E/M&E.
Finally, 28% of operators reported the inclusion of a cost recovery clause for energy efficiency upgrades.
Borivoj Vokrínek, partner, strategic advisory, head of hospitality research EMEA, Cushman & Wakefield said: 'It is encouraging to see the focus on sustainability among operators, increasingly willing to support hotel owners investing in ESG by offering better commercial terms in their management and lease contracts.
'All stakeholders in our sector need to work together to make the hospitality industry more sustainable. From this perspective, it is also good to see the increased interest in the second tier and third-tier cities that should help to bring employment to the regional areas and spread the concentration of tourism from the major gateway cities and few key resort destinations.'
