CBRE Hungary HOTEL Panorama

PANORAMA
HUNGARY HOTELS
BUDAPEST PERFORMED THE LARGEST KPI IMPROVEMENT AMONG MAJOR EUROPEAN CITIES
AVERAGE
OF 2014
RANKING
OF BUDAPEST*
A DR
+5pps
+7.1%
+14.3%
+20.4%
75%
EUR 88
EUR 67
EUR 34
CY
Budapest performed as the best
in CEE ahead of Prague, Warsaw
and Bucharest in most key
performance indicators.
CUPAN
R
OC
GOPPAR
AR
evP
1.
1.
2.
1.
Source: HotStats
* Based on annual % change – CEE capitals include Bucharest, Budapest, Prague and Warsaw
TOURISM DEMAND SHOWS A ROBUST GROWTH
Growth of Guest Arrivals in 2014 (y-o-y)
For the first time since 2009,
guest arrivals in pan-regional
locations showed higher growth
rate than Budapest.
BUDAPEST
+5.6%
+7.2%
HUNGARY
Source: Hungarian Central Statistical Office (HCSO)
BUDAPEST IS EXPECTED TO SEE SEVERAL NEW HOTEL OPENINGS IN THE COMING YEARS
1 200
Hotel development is recovering
with several historic schemes
being under refurbishment in
Budapest downtown.
No. of rooms
1 000
800
Existing
600
Under
construction
400
200
Planned
0
2010
2011
2012
2013
2014
Source: CBRE Research, I-build.info
2015
(U/C)
2016
2017
(U/C) (planned)
Service industries (including
tourism) have picked up with
a y-o-y growth of 4.6% in Q4
2014, whilst manufacturing
growth has lost some
momentum over 2014.
Source: Hungarian Central Statistical Office (HCSO)
Note: Data in the bubbles indicate the Q4 2014 y-o-y growth
© 2015 CBRE Kft.
y-o-y growth
IN 2014, HUNGARY POSTED THE SECOND HIGHEST GDP GROWTH RATE IN EU-28
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
5.5%
Manufacturing
4.6% Services
3.4% TOTAL
Q1
Q2 Q3 Q4 Q1
2012
Manufacturing
Q2 Q3 Q4 Q1
2013
Q2 Q3 Q4
2014
Services*
TOTAL
1
PANORAMA
HUNGARY HOTELS
TOURISM DEMAND IN HUNGARY
Number of Guest Arrivals and Average Length of Stay in Hungary (domestic / foreigner split)
Foreign Guests
Domestic Guests
3.5
12
Average Length of Stay
10
• Domestic guests posted higher growth rate than foreigners
2.5
2.0
6
1.5
4
in 2013-2014
No. of Days
8
Million
• Guest arrivals have increased in each year since 2009
3.0
• Foreigners’ share is historically around 50% and does not show
any tendency changes since data are available (2001)
1.0
Domestic guests
Foreign guests
• Average length of stay (2.5 days) is similar to other CEE countries
and it is gradually declining
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
0.0
2003
0
2002
0.5
2001
2
Source: Hungarian Central Statistical Office (HCSO)
Average Length of Stay (right)
Key Hungarian Tourist Destinations Based on Guest Arrivals per Type of Accomodation in 2014
Hotels
Other Accomodation
4.0
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
3.5
3.0
Million
2.5
Share of Foreigners
2.0
1.5
1.0
0.5
Hotels
Other accomodation
absorbing 37% of total guest arrivals (3.5 million in 2014)
• Average length of stay is the longest in leisure driven spa cities
such as Hévíz (5.3 days) and Bük (4.1 days) and the shortest in
Budapest (2.3 days) and other regional cities
• Despite lower than average growth in guest arrivals in recent
years, Lake Balaton is still the second largest tourist destination
Rest of Hungary
Mecsek & Villány
Danube-bend
Sopron & Kőszeg
Mátra-Bükk
Lake Balaton
Budapest
0.0
• Budapest is still the most attractive tourist destination in Hungary,
Source: Hungarian Central Statistical Office (HCSO)
Share of foreigners
SHARE OF FOREIGNERS IN GUEST ARRIVALS
26%
VÖRÖSMARTY TÉR, BUDAPEST
REST OF HUNGARY
BUDAPEST
86%
Domestic tourism plays an important role outside of Budapest only.
© 2015 CBRE Kft.
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PANORAMA
HUNGARY HOTELS
TOURISM DEMAND IN HUNGARY
Growth of Guest Arrivals in Selected Hungarian Tourist Destinations
2008=100%
160%
Mátra-Bükk
Budapest
Hungarian average
Lake Balaton
150%
151%
140%
135%
124%
130%
120%
110%
100%
• Since 2008, the Mátra-Bükk region showed the highest
growth rate where demand is largely driven by new
hotel supply
112%
• In 2014, 35% more guests came to Budapest than in
100%
2008, outperforming the national average growth of
24%
90%
80%
2008
2009
Hungarian average
2010
2011
2012
Budapest
CHANGE
IN GUEST
ARRIVALS BY COUNTRY OF ORIGIN
Lake Balaton
Mátra-Bükk
Source: Hungarian Central Statistical Office (HCSO)
Note: All figures are compared to the base year of 2008
+57%
+54%
RUS
CHI
+46%
+32%
SK
GB
+28%
+20%
PL
AVERAGE
AUT
2014
+119%
KOR
GER
2013
+2%
+0%
• Germany and Austria are still the largest source
markets; however, the increase of guest arrivals lagged
behind compared to other countries
• UK, US and CEE countries are also important source
markets with a more dynamic growth in recent years
• Relatively smaller source markets such as South Korea,
China and Russia posted the highest increase since 2011
Source: Hungarian Central Statistical Office (HCSO)
Note: Figures indicate overall change in guest arrivals between 2011 and 2014
GROWTH DYNAMICS OF GUEST ARRIVALS
BUDA CASTLE, BUDAPEST
2014
+5.9%
2010
-6.5%
2009
2008
+3.9%
2004
Annual average growth rate of guest arrivals is already higher than before the crisis.
© 2015 CBRE Kft.
Source: Hungarian Central Statistical Office (HCSO)
Note: Figures refer to national level and show the annual average growth rates in the subject periods
3
PANORAMA
HUNGARY HOTELS
BUDAPEST HOTEL MARKET
Key Hotel Performance Indicators in Budapest
RevPAR
ADR
120
80%
Occupancy rate
70%
100
60%
EUR
80
50%
40%
60
30%
40
20%
20
0
2007
2008
2009
2010
2011
2012
2013
• Number of guest arrivals increased with an average annual
growth rate of 6% since 2009 which has helped to push up
occupancy rate
• Increasing demand was backed by leisure tourism as business
tourism stagnated in recent years
• Despite growing ADR figures, Budapest still offers a good
10%
price-to-value ratio compared to other CEE capitals; in recent
0%
years this was clearly backed by the appreciation of HUF
2014
Source: HotStats, CBRE Research
Note: Data indicates annual average figures.
Key Hotel Performance Indicators in Budapest
TRevPAR
EUR
GOPPAR
110
100
90
80
70
60
50
40
30
20
10
0
• GOPPAR growth in 2014 was higher than TrevPAR
increase as hotels have improved on the cost savings side
• Since 2010, TrevPAR growth was continuosly lower than
RevPAR growth as more hotels tend to incorporate
additional services in room rates in order to attract more
guests
2007
2008
2009
2010
2011
2012
2013
2014
Source: HotStats, CBRE Research
Note: Data indicates annual average figures.
HOTEL MARKET SHOWED CLEAR SIGNS OF A RECOVERY IN 2014. ALL KEY PERFORMANCE INDICATORS IMPROVED ON THE
BACK OF GROWING NUMBER OF TOURIST ARRIVALS AND GUEST NIGHTS.
DEMAND FOR HOTEL ACCOMMODATION IN BUDAPEST IS MOSTLY FUELED BY LEISURE TRAVELERS AND TO A LESS EXTENT
BY BUSINESS. THE HUNGARIAN CAPITAL HAS MATURED AS A KEY DESTINATION FOR CITY BREAKS AND SPA TOURISM IN
THE CEE REGION. THE CITY ATTRACTS MORE ARRIVALS FROM NEW SOURCE MARKETS WHILE KEEPS THE CLIENTELE FROM
TRADITIONALLY IMPORTANT COUNTRIES.
© 2015 CBRE Kft.
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PANORAMA
HUNGARY HOTELS
BUDAPEST HOTEL MARKET
HOTEL INVESTMENT MARKET
Key Hotel Performance Indicators
ADR
in Benchmark Cities
RevPAR
In 2014 EUR 80 million investment turnover was registered
in Hungary, representing 17% share in the total investment
Budapest
turnover.
Madrid
Prague
Intercontinental, a large five-star hotel in Budapest CBD was
y-o-y change
Bucharest
traded for the third time since the financial crisis, reflecting the
Milan
Vienna
continuing interest of investors of Middle-East origin in the
Berlin
best-in-class hotel assets in the Hungarian capital.
Frankfurt
London
As a new phenomenon on the market, we see increased
Paris
Source: HotStats, CBRE Research
Note: Data refer to the period Feb 2014 – Jan 2015
Warsaw
-5%
0%
5%
10%
investors’ interest for three- and four-star hotels in the
countryside. Banks have increased their disposal activity in this
15%
market niche and managed to sell part of their repossessed
Key Hotel Performance Indicators
GOPPAR
in Benchmark Cities
TRevPAR
portfolio. Three such transactions were confirmed in 2014;
however, we believe several other assets could be sold in the
deal size range of EUR 3-5 million, therefore our investment
turnover estimation for 2014 can be understated. On the other
Budapest
hand, there is still limited appetite for larger assets (above EUR
Madrid
15 million) in the countryside.
Prague
Bucharest
y-o-y change
Milan
Besides the income-generating hotel deal flow, we registered
Vienna
transactions worth of cca. EUR 45-50 million in total of vacant
Berlin
properties purchased for hotel development. This activity solely
Frankfurt
concentrated to downtown of Budapest. Same source of money
London
Paris
Source: HotStats, CBRE Research
Note: Data refer to the period Feb 2014 – Jan 2015
Warsaw
-10%
-5%
0%
5%
10%
15%
20%
25%
is driving this market segment; investors from the Middle East
have been the most active also in such purchases.
HOTEL PIPELINE IN BUDAPEST (2015-2016)
HOTEL NAME
Bo33 Hotel
Prestige Hotel Budapest
Rácz Hotel & Thermal Spa
Hotel Ária
Helvetic Clinics Hotel
Hotel di Verdi
A8 Palace Hotel
Dorottya 8 Hotel
© 2015 CBRE Kft.
OPENING
2015
2015
20151
2015
2015
2016
2016
2016
CATEGORY
Upscale
Upscale
Upper upscale
Upper upscale
Upscale
Upscale
Upscale
Midscale
NO OF ROOMS
62
85
62
49
802
190
110
120
Source: I-build project database,
CBRE Research
Note:
project put on hold
estimated room number
1
2
5
PANORAMA
HUNGARY HOTELS
CONTACTS
CEE/EMEA HOTEL CONTACTS
CBRE HUNGARY CONTACTS
Jos Tromp MRICS
Lóránt Kibédi Varga
Senior Director
Managing Director
Head of Research
Hungary
[email protected]
[email protected]
Martin Thom MRICS
Gábor Borbély MRICS
Director
Director
Valuation
Head of Research & Consultancy
[email protected]
[email protected]
Joe Stather
Attila Kapitány
Information & Intelligence Manager
Research Analyst
CBRE Hotels
Research
[email protected]
[email protected]
CBRE HUNGARY OFFICE
CBRE Kft. | Hungary |Eiffel Palace|Bajcsy-Zsilinszky út. 78. |
Budapest | 1055 | Hungary |
T +36 1 374 3040 |
http://www.cbre.hu
Disclaimer: Information contained herein, including projections, has been
obtained from sources believed to be reliable. While we do not doubt its
accuracy, we have not verified it and make no guarantee, warranty or
representation about it. It is your responsibility to confirm independently its
accuracy and completeness. This information is presented exclusively for use
by CBRE clients and professionals and all rights to the material are reserved
and cannot be reproduced without prior written permission of CBRE.
SET OF DEFINITIONS
ADR
(Average Daily Rate)
COLLECTIVE
ESTABLISHMENTS
GOPPAR
(Gross Operating Profitper Available Room)
GUEST ARRIVALS
KPI
(Key Performance Indicator)
OCCUPANCY
RevPAR
(Revenue per Available Room)
TrevPAR
(Total Revenue per Available Room)
© 2015 CBRE Kft.
A measure of the average rate paid for rooms sold, calculated by dividing room revenue by rooms sold.
All establishments entitled by operation license, built and used for tourist accommodation purpose
(including hotels, hostels, boarding houses and campsites).
Gross operating profit (GOP) divided by total available rooms, where GOP is equal to total revenue less
the total departmental and operating expenses.
Number of people spent at least one night in a collective establishment.
Group of variables that measures hotel performance.
Occupancy is the percentage of available rooms that were sold during a specified period of time.
Total guest room revenue divided by the total number of available rooms.
A measure of total revenue per available room, calculated by sum of room, food and beverage (F&B),
and other revenue divided by total available rooms.
6