Horwath HTL l European Hotels & Chains Report

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1 European Chains & Hotels Report

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3 Welcome to Horwath HTL, the global leader in hospitality consulting. We are the industry choice; a global brand providing quality solutions for hotel, tourism & leisure projects. At Horwath HTL, our focus is one hundred percent on hotel, tourism and leisure consulting. Our services cover every aspect of hotel real estate, tourism and leisure development. Page Foreword Page 6 Introduction Page Europe: Hotel Chains Page Europe: Year on Year Growth & Total Supply Page Europe: Domestic & International Brands Page 6 Europe: Country Data Page Page Page 36 Page 6 Page 56 Page 66 Page 76 Page 6 Page 96 Page 6 Page 6 Page United Kingdom Horwath HTL l European Hotels & Chains Report 3

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5 European Chains Report A very warm welcome to the second edition of our European Chains Report, which looks at the development of branded and chain hotels across the key markets. The data shows that the number and ratio of branded hotels is increasing in almost all of the markets we reported on, through a variety of different business models Excitingly, we now have year on year data to analyse which has thrown up some very interesting results, as you will see. The industry overall has been going through a period of consolidation, with pretty much all of the major hotel groups being involved in a transaction as either a buyer or seller. The big one a couple of years ago was Marriott and Starwood and we are starting to see the effects of that filter through into new brand development, but the others have not been standing by. Accor in particular has been on a spending spree, snapping up whole brands to fill gaps in their market segmentation, or taking bets through minority positions in developing brands in other segments that may or may not play out for them. Based on this activity, would we expect the number of branded properties to be going up or down? The data shows that the number and ratio of branded hotels is increasing in almost all of the markets we reported on, through a variety of different business models. Of the big markets in particular stands out, with chain hotels increasing by over 6% year on year, but they are far from the only market with a significant increase.,,,, The and all experienced an increase of 3% or greater. Interestingly, and the United Kingdom bucked the trend, although considering how saturated they are with branded properties, it s hardly a surprise. There are many more nuggets of fascinating information in the report, and we hope you enjoy this edition. IHG bought Kimpton, which is launching in the after the acquisition of the Principal Hotel company in the by French fund Covivio (formerly the less snappy Foncière des Régions). As we go to print, s NH group is on the block, with Thai-based Minor group looking set to close the deal. James Chappell Horwath HTL Global Business Director Horwath HTL l European Hotels & Chains Report 5

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7 Introduction It is clear that chain and branded hotels are growing, ever more popular with owners looking to mitigate their risk. What is significant for our market, is that many of these brands have been developed locally. This is a positive sign as it shows we have the confidence to compete internationally with our products. Olaf Steinhage, Managing Partner, Horwath HTL and Chairman of ZIA In the compilation of the data, we asked our offices to not just rely on available local data, but to create our own databases from scratch. We were then able to make a sanity check with reputable data providers like Eurostat which, although a few years old, have comprehensive numbers on hotels, restaurants, hostels, pensions and all the rest. We then dug deeper into each market to get an understanding of the players and what size and scope they have. We looked at overall ranking by size in each country, by overall group (hotels and rooms) and by brand. We broke the information down by domestic and international groups and brands and then by scale/style of hotels. Finally, for this edition, we broke each country down to major cities or destinations to give a deeper understanding of what chain penetration is. We have been able to compare year on year data for the key indicators. The graphs and charts will then show where the differences are and you can identify easily why the changes are taking place. We were not able to get data for this year, so we left their 6 data in the overall Europe numbers, but left them out of the specific country reports. In order to standardize the data, we looked at the same KPI s across all countries using the same methodology: Total number of chain hotels Total number of chain rooms Average size per chain hotel in rooms Country hotels stock (overall supply) Country rooms stock (overall supply) Average size per hotel in rooms Chain penetration % by hotels Chain penetration % by keys Total number of brands Domestic brands International brands Second tier operated hotels International chain hotels (including double counting) Domestic chain hotels (including double counting) International chain rooms (including double counting) Domestic chain rooms (including double counting) James Chappell Horwath HTL Global Business Director Horwath HTL l European Hotels & Chains Report 7

8 Chain Hotels in Europe Chain hotels: 3,5 Chain rooms: 373, Chain penetration (hotels): % Chain penetration (keys): 9% Chain hotels: 663 Chain rooms: 76,33 Chain penetration (hotels): 9% Chain penetration (keys): 5.9% Chain hotels:,7 Chain rooms: 3,5 Chain penetration (hotels): % Chain penetration (keys): 37.% Chain hotels: 3 Chain rooms: 3,7 Chain penetration (hotels): % Chain penetration (keys): % Chain hotels: 3 Chain rooms: 7, Chain penetration (hotels): % Chain penetration (keys): 37% Chain hotels: 3,6 Chain rooms: 39,56 Chain penetration (hotels): % Chain penetration (keys): % Chain hotels: 7 Chain rooms: 3,9 Chain penetration (hotels): 6% Chain penetration (keys): 3% Chain hotels:,53 Chain rooms: 36,77 Chain penetration (hotels): 33% Chain penetration (keys): 56% Chain hotels:, Chain rooms: 6,96 Chain penetration (hotels): 5% Chain penetration (keys): 5% Chain hotels: Chain rooms:,567 Chain penetration (hotels): 3% Chain penetration (keys): 33% Chain hotels: 67 Chain rooms: 3, Chain penetration (hotels): % Chain penetration (keys): 53.% Chain hotels: Chain rooms: 5,99 Chain penetration (hotels): % Chain penetration (keys): % Horwath HTL l European Hotels & Chains Report

9 Chain Hotels in Europe The first number that leaps out when looking at chain hotel statistics, is just how much bigger branded hotels are than their independent counterparts This may be self-evident given the rule of thumb that you need a minimum of rooms to make money, certainly outside of super budget hotels, but is worth exploring. It s also clear that branded hotel companies are not interested in putting their flag on hotels that won t make money. For 7, the average chain hotel had 6 rooms and the average independent hotel had 57. The biggest manifestation of this is in the United Kingdom where chains make up only % of the overall supply of hotels, but a massive 9% of rooms. In other markets, similar ratios are on display. has just over % of hotels accounting for 37% of rooms, has 5% versus 5%, the has 9% versus 59% etc, the picture is clear. Even the smaller markets like follow a similar pattern, in that case 3% versus 33%. It s only in markets where there is domination by a relatively small amount of players, and being the two biggest, that you see a huge representation of both chain hotels and chain rooms., due to all of the Accor brands has a ratio of % hotels and % rooms. is even more dominated by chains, with 33% hotel penetration and 56% hotel penetration. There is also a large disparity in the sheer number of chain properties per market. Top again is with 3,6 hotels, closely followed by the on 3,5 and then on,53 and on,7. After that it s a big drop to with, and an even bigger fall to the on 663. James Chappell Horwath HTL Global Business Director Horwath HTL l European Hotels & Chains Report 9

10 Year On Year Growth & Total Supply -.5% year on year growth.5% total rooms in Europe.73% total hotels in Europe 3.6% year on year growth.% total rooms in Europe.% total hotels in Europe.% year on year growth 6.5% total rooms in Europe 3.% total hotels in Europe 7% year on year growth 9.% total rooms in Europe 9.6% total hotels in Europe 7.9% year on year growth.6% total rooms in Europe.% total hotels in Europe -.% year on year growth 7.6% total rooms in Europe.6% total hotels in Europe.% year on year growth.7% total rooms in Europe.76% total hotels in Europe.3% year on year growth.% total rooms in Europe 5.% total hotels in Europe.5% year on year growth.3% total rooms in Europe.% total hotels in Europe.5% year on year growth.% total rooms in Europe.9% total hotels in Europe.6% year on year growth.7% total rooms in Europe.% total hotels in Europe % year on year growth.3% total rooms in Europe.5% total hotels in Europe Horwath HTL l European Hotels & Chains Report

11 Year On Year Growth & Total Supply What the data clearly shows is that the overall share of chain hotels versus independent is increasing, even in markets that can be considered very mature. What the data clearly shows is that the overall share of chain hotels versus independent is increasing, even in markets that can be considered very mature. The exceptions to this trend however are two key markets, the and, both of whom experienced slight drops in overall chain hotel numbers (-.5% and -.%). Interestingly, both markets showed a healthy growth in the number of chain rooms, which shows that consolidation caused by mergers and acquisitions activity meant that new products being absorbed by the big players made up for the loss of smaller, worse performing properties. For the markets that grew, s 5% is the most eye catching, although the overall numbers are small. had a significant increase of over 6% which equated to 7 new hotels and almost 9, rooms. grew by %, by 7%,.5% and by.%. In s case the actual growth came to hotels with over, rooms. Overall the number of chain affiliated hotels grew by 373, which accounts for almost 39, rooms. This increase is even more impressive when you consider that overall hotel supply for the region fell in 7 by 3 hotels, taking the overall inventory from 5,573 to 5,7. Looking at the percentage of each market versus Europe as a whole, the single biggest market is with almost 5% of the entire European chain sector. The follows with.7%, with 5.%, with 3.% and on 9.6%., which is seen correctly as a boom market and has chain hotels, only makes up slightly less than % of European supply. James Chappell Horwath HTL Global Business Director Horwath HTL l European Hotels & Chains Report

12 Domestic & International Brands Total no. of brands: % of total brands: % Domestic chains: 6 International chains: Total no. of brands: 7 % of total brands: % Domestic chains: 39 International chains: 6 Total no. of brands: 3 % of total brands: % Domestic chains: 9 International chains: Total no. of brands: 3 % of total brands: % Domestic chains: International chains: 3 Total no. of brands: 6 % of total brands: % Domestic chains: 6 International chains: 35 Total no. of brands: 7 % of total brands: % Domestic chains: 5 International chains: 55 Total no. of brands: 65 % of total brands: 5% Domestic chains: International chains: 57 Total no. of brands: 9 % of total brands: % Domestic chains: International chains: 6 Total no. of brands: 7 % of total brands: 6% Domestic chains: 37 International chains: 9 Total no. of brands: 5 % of total brands: 3% Domestic chains: 6 International chains: 39 Total no. of brands: % of total brands: % Domestic chains: 5 International chains: 5 Total no. of brands: 6 % of total brands: % Domestic chains: International chains: Horwath HTL l European Hotels & Chains Report

13 Domestic & International Brands One of the fascinating points is how some otherwise excellent tourism markets, like for example, just haven t developed local brands that export to the same level as other similar countries. The next issue to look at is the make-up of brands in each country and see how much penetration international brands have made in each market. One of the fascinating points is how some otherwise excellent tourism markets, like for example, just haven t developed local brands that export to the same level as other similar countries. Let us exclude for a moment, which is dominated by one family of brands, and look at compared to. Both markets are huge, has 667, hotels overall versus. million in, and when you look at the brand picture, superficially quite similar. has 9 brands versus 7 in. The ratios of domestic versus international brands is also quite similar, has a ratio of /6 and 37/9 and yet in terms of chain penetration they could not be more different. has a brand penetration of almost 3% for hotels and 56% for rooms whereas is just over 5% for hotels and 5% on rooms. The market penetration of international versus domestic brands is also fascinating. leads the way with international chains making up almost 9% of their brands. has 7% international chains, % and 75%. Are these international brands stopping the growth of domestic giants? Maybe, in the smaller markets almost certainly because why would an owner bet on a new local player with potential, when he can take much less risk on an international brand with global distribution and a track record. The finance community will also be black and white in terms of lending. One last point to make is that a large number of domestic brands does not always equate to international success for those brands. is the obvious candidate with the incredible success of the Accor brand, but has 37 domestic brands and you would be hard pushed to name many of those that have made it overseas. James Chappell Horwath HTL Global Business Director Horwath HTL l European Hotels & Chains Report 3

14 Total Brands: International vs. Domestic Europe: Total Number of Brands Total International brands 7 Total Domestic brands Horwath HTL l European Hotels & Chains Report

15 Total Brands: Domestic vs. International Total Domestic brands Total International brands Total Brands: % of Total of brands in Europe 5 6 % Horwath HTL l European Hotels & Chains Report 5

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17 Europe: Country Data Page Page Page 36 Page 6 Page 56 Page 66 Page 76 Page 6 Page 96 Page 6 Page 6 Page United Kingdom Horwath HTL l European Hotels & Chains Report 7

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19 The market is dominated by domestic chains with strong seasonal operations. This has meant that there has been little incentive to develop and add international brands yet. Siniša Topalović, Managing Director, Horwath HTL Key Statistics 7 Chain hotels 67 Chain rooms 3, Average size per chain hotel in rooms Country hotels stock (overall supply) 6 Country rooms Stock (overall supply) 57,5 Average size per hotel in rooms.6 Chain penetration % by hotels.% Chain penetration % by keys 53.% Total number of brands Domestic brands 5 International brands 5 Second-tier operated hotels 65 International chain hotels (including double counting) 59 Domestic chain hotels (including double counting) 9 International chain rooms (including double counting) 3,6 Domestic chain rooms (including double counting), Horwath HTL l European Hotels & Chains Report 9

20 : The market The n hotel market is a rather slowly developing market, despite all the natural and historical attractions. There is a relatively high amount of chain affiliated hotels and rooms for a smaller market, (5% and 53% respectively) and the market is dominated by domestic chains with strong seasonal operations. This has meant that there has been little incentive to develop and add international brands. The biggest challenge is the lack of foreign investors, a result of several factors: strong domestic investors that finance major investment opportunities on an exclusive basis, slow privatisation of tourism state assets, seasonality and slow administration. Hotel performance data is showing a positive trend however. 7 showed an increase of % in hotel occupancy and an even stronger growth of average room rates ( 7%), which resulted in growth for all the hotel KPI s (RevPAR increased 9% and GOPPAR around %) which is extremely good. With the country averaging overall % room occupancy, there is still room for improvement. Seasonality is one of the most serious challenges for coastal destinations (with the exception of bigger cities like Dubrovnik, Split, Rijeka and the Istria Region) that have a stronger shoulder season and longer periods of operations. From a development standpoint, there are hotels in the pipeline (not counting small hotels) with a total of 9 projects planned and underway, of which are in Zagreb. It is important to note that mid-term outlook is rather optimistic, with around, hotel keys, including internationally branded properties led by Hilton, Marriott and Four Seasons, among others. Hotel investments are picking up, supported by very favourable investment terms provided by the n bank for reconstruction and development (HBOR) including low interest rates, years grace periods and up to 7 years repayment period. Considering the positive market outlook, favourable investment terms and increasing positive image of on global market, coupled with still low share of hotel capacities in total accommodation stock, the time is right to consider hotel investment in. Horwath HTL l European Hotels & Chains Report

21 : Year on year data Key Statistics 6 7 % Diff. Chain hotels % Chain rooms 3,3 3, -.% Average size per chain hotel in rooms 9 -.6% Country hotels stock (overall supply) 6 6.% Country rooms stock (overall supply) 5,7 57,5 -.3% Average size per hotel in rooms,5,63 -.3% Chain penetration % by hotels.3%.%.% Chain penetration % by keys 5.% 53.% -.7% Total number of brands 9 5.3% Domestic brands 5 5.% International brands 5 5.% Second-tier operated hotels % International chain hotels (including double counting) % Domestic chain hotels (including double counting) 9 -.% International chain rooms (including double counting) 3,9 3,6 -.% Domestic chain rooms (including double counting),55, -.% : Key points Valamar still on top The Valamar Rivera hotel group is still by far the largest player in the market with 3 hotels and over 5,5 rooms. First acquisition outside of is being finalised during the preparation of report and includes an upscale hotel in Obertauern,. Upscale hotels most popular The largest segment for chain hotels in is upper and upper upscale hotels (3/ stars) with a whopping 7% belonging in that segment. This is remarkably similar to other markets like which has 5% of chain hotels in the same segment. Budget hotels are only 9% and luxury 5.6%. Melia top of the International Brands For International chains, Spanish group Melia is top of the list with 9 hotels and, rooms, followed by Park Plaza Hotels with 6 hotels and,5 rooms. Owner Operator Model Owner operator is still very much order of the day in with 53 out of 7 hotels following this model. Next up is Franchising on % of the market, or hotels, followed by hotels or 6% of the market on Management Contracts. Leases are a tiny part of the market with only %. Horwath HTL l European Hotels & Chains Report

22 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size Hotels % Rooms Avg. Size Budget & Economy 3.6 7,5 7 Midscale 65 3.,9 67 Upscale & Upper-Upscale ,7 Luxury 7 5.,6 TOTAL 67. 3, DOMESTIC Hotels % Rooms Avg. Size Budget & Economy 75. 6,5 7 Midscale ,3 66 Upscale & Upper-Upscale ,6 99 Luxury ,77 7 TOTAL 6. 57,5 5 : Ranking by location : Primary Demand Driver Rank Destination Hotels Rooms Poreč 3 5, Dubrovnik 9 3,666 3 Opatija 5,79 Umag 9,69 5 Rovinj,56 6 Zagreb,5 7 Šibenik,39 Rabac 7,35 9 Cavtat 6,33 Mali Lošinj 5 95 DRIVER International Domestic Hotels Rooms Hotels Rooms Arts & Business 6,7 33 Business Focus Other Leisure Ski Sun & Beach 9, , Thermal Horwath HTL l European Hotels & Chains Report

23 : Ranking by size Rank Chain Groups Hotels Rooms Valamar Riviera 3 5,556 Plava Laguna 3,95 3 Liburnia Riviera 5,3 Bluesun H&R,3 5 Istraturist 9, 6 Melia Hotels 9, 7 UGO-Grupa,6 Arenaturist 6,5 9 HUP-Zagreb,5 PPHE 6,5 BRANDS Rank Chain Brands Hotels Rooms Valamar Riviera 3 5,556 Remisens 5,3 3 Bluesun H&R,3 Melia Hotels 9, 5 Park Plaza Hotels 6,5 6 Adriatic Luxury Hotels,569 7 Falkensteiner 5,5 Sheraton Radisson Blue 5 Ilirija H&R 5 6 Rank Domestic Chain Groups Hotels Rooms Valamar Riviera 3 5,556 Plava Laguna 3,95 3 Liburnia Riviera 5,3 Istraturist 9, 5 Bluesun H&R,3 6 Maistra,56 7 UGO-Grupa,6 Arenaturist 6,5 9 HUP-Zagreb,5 Adriatic Luxury Hotels,569 BRANDS Rank Domestic Chain Brands Hotels Rooms Valamar Riviera 3 5,556 Remisens 5,3 3 Bluesun H&R,3 Adriatic Luxury Hotels,569 5 Ilirija H&R Rank International Chain Groups Hotels Rooms Melia Hotels 9, PPHE 6,5 3 Falkensteiner 5,5 Starwood H&R,9 5 Hilton Worldwide 99 6 Carlson Rezidor 5 7 Karisma Hotels 5 Rixos 5 9 Holleis Hotels Kempinski 6 BRANDS Rank International Chain Brands Hotels Rooms Melia Hotels 9, Park Plaza Hotels 6,5 3 Falkensteiner 5,5 Sheraton Radisson Blue 5 6 Le Meridien Lav 3 7 Karisma Hotels 335 Hilton 99 9 Westin 9 Arcotel 5 Horwath HTL l European Hotels & Chains Report 3

24 : Domestic & International brands vs. Europe 3, 3, % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms 3,6 3,5,53, 3, 36,77 373, 39,56 3.5,,7,, 6,96, , 76,33 7,,56 3, 3,9 3,7,567 5,99 Chain hotels Chain rooms : Total of brands per Europe total 3 9 % % Total of brands per European total Total number of brands Horwath HTL l European Hotels & Chains Report

25 : European Chain Penetration.% chain hotels 67 total chain hotels : Business Model HOTELS Franchising % Lease % Management contract % Owned % Total % Economy % % 6% 7 9% % Midscale 3 6% % % 7 9% 5 % Upscale & Upper-Upscale 6 % % 5% 6 6% 79 % Luxury 5 7% % 3 % 7% 9 % Total % % 6% 53 7 % ROOMS Franchising % Lease % Management contract % Owned % Total % Economy % % %,63 9%,95 % Midscale 5 6% % 373 % 7,59 9%,7 % Upscale & Upper-Upscale,59 % 5 %,35 % 3,7 % 5,9 % Luxury, 9% % 76 3%,69 6% 5,97 % Total 3,3 % 5 %,59 % 7, 33,7 % Horwath HTL l European Hotels & Chains Report 5

26 : Ranking by scale (all brands) Rank Economy & Midscale Hotels Rooms Valamar Riviera 3,5 Bluesun H&R 6,7 3 Remisens 9,9 Park Plaza Sol Melia Karisma Hotels Falkensteiner Adriatic Luxury Hotels 5 9 Ilirija H&R 7 - Rank Upscale & Upper Upscale Hotels Rooms Valamar Riviera 7,756 Melia Hotels 5, 3 Remisens Bluesun H&R Park Plaza Falkensteiner Ilirija H&R 3 7 Carlson Rezidor 5 9 Holleis hotels Adriatic Luxury Hotels 73 Rank Luxury Hotels Rooms Starwood H&R,9 Adriatic Luxury Hotels 5, 3 Valamar Riviera 9 Rixos 5 5 Melia 5 6 Falkensteiner 7 Carlson Rezidor Remisens 9 Bluesun H&R 6 Hilton Worldwide 7 : Destination pipeline (-9) PIPELINE Rank Destination Hotels Current Hotel Investments Hotels Total Rooms Current Rooms Investment Rooms Total Opatija 5 6,79,97 Umag 9,69 36,95 3 Rovinj 9,56,756 Zagreb,5 7,7 5 Zadar 5 5,6 6 Hvar Horwath HTL l European Hotels & Chains Report

27 : Ranking by scale (Domestic vs International brands) DOMESTIC Rank Economy & Midscale Hotels Rooms Valamar Riviera 3,5 Bluesun H&R 6,7 3 Remisens 9,9 Adriatic Luxury Hotels 5 5 Ilirija H&R INTERNATIONAL Rank Economy & Midscale Hotels Rooms Park Plaza Falkensteiner 3 Sol Melia 3 5 Karisma Hotels DOMESTIC Rank Upscale & Upper Upscale Hotels Rooms Valamar Riviera 7,756 Remisens Bluesun H&R 5 99 Ilirija H&R Adriatic Luxury Hotels INTERNATIONAL Rank Upscale & Upper Upscale Hotels Rooms Melia Hotels 5, Park Plaza Falkensteiner 3 7 Carlson Rezidor 5 5 Holleis hotels 6 DT by Hilton 5 7 Arcotel 5 D Hotels 69 9 Brown 5 - DOMESTIC Rank Luxury Hotels Rooms Adriatic Luxury Hotels 5, Valamar Riviera 9 3 Remisens Bluesun H&R INTERNATIONAL Rank Luxury Hotels Rooms Starwood H&R,9 Hilton 7 3 Rtixos 5 Melia 5 5 Falkensteiner 6 Carlson Rezidor Horwath HTL l European Hotels & Chains Report 7

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29 Hotels chains in are predominantly domestic chains with only with a.9% of hotels representing International chains. Some of the dominant tourism trends on the island (all-inclusive, large resorts) along with the small market size, make it so international chains are not that interested, despite the high occupancy rates. Christos Michaelides, Managing Director, Horwath HTL Key Statistics 7 Chain hotels 5 Chain rooms 5,355 Average size per chain hotel in rooms Country hotels stock (overall supply) 3 Country rooms Stock (overall supply) 53,5 Average size per hotel in rooms 39.7 Chain penetration % by hotels.% Chain penetration % by keys.% Total number of brands 6 Domestic brands International brands Second-tier operated hotels Horwath HTL l European Hotels & Chains Report 9

30 : The market is by all measures a small country. Nevertheless one that relies on tourism greatly and pays close attention to it. This has led to a significant increase in tourism in the last couple of years and hence a need for rapid development from the hotel stock that already running on high occupancies in the High season. Foreign investor presence is apparent in some cases, however the combined intent of both foreign and local investors is still not enough to cover the developmental needs of the market. This is mainly due to geopolitical reasons Despite all of the above tourism has marked a 5% growth in 7 vs 6, occupancy for hotels has increased more than 35% and even greater increases are expected for. This combined with the healthy growth of Hotels, and the apparent margins for performance improvement should render the sector even more attractive in the following years. 3 Horwath HTL l European Hotels & Chains Report

31 : Year on year data Key Statistics 6 7 % Diff. Chain hotels 7 5 Chain rooms 5,39 5,355 Average size per chain hotel in rooms 76 Country hotels stock (overall supply) 3 3 Country rooms stock (overall supply) 53,7 53,5 Average size per hotel in rooms Chain penetration % by hotels 3%.% Chain penetration % by keys %.% Total number of brands 6 6 Domestic brands International brands Second-tier operated hotels : Key points The chain are slowly moving in: There is confirmation of international chains moving into the market in the near future with assets already identified. We believe that as the number of international chains increases on the island, more and more of them will show interest. Domestic chain growth: Whilst most of the sector wishes to attract international chains, our own domestic chains are doing extremely well, with of them expanding with more hotels abroad this year and diversifying into other, parallel activities. The opportunity is there: + Hotel projects are currently under development and s more are at initial stages. Almost all of these cases would prefer an international chain to enter the project in any form. This combined with the many incentives of running a tourist business in should be enough to make the opportunity attractive Horwath HTL l European Hotels & Chains Report 3

32 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size CHAIN HOTELS CHAIN ROOMS Hotels % Rooms Avg Size Intl. Dom. Intl. Dom. Budget & Economy.% Midscale 5.%, ,7 Upscale & Upper-Upscale.%,, Luxury 7.%, ,7 TOTAL 5.% 5, , OVERALL COUNTRY CHAIN HOTELS CHAIN ROOMS Hotels % Rooms Avg Size Intl. Dom. Intl. Dom. Budget & Economy 65 9.%, Midscale 76 3.% 5, ,7 Upscale & Upper-Upscale %, , Luxury 5.%, ,7 TOTAL 3.% 53,5 7, : Ranking by location Rank Destination Hotels Rooms Famagusta 73,535 Pafos 56 7,76 3 Limassol 3 9,55 Larnaca 5, 5 Nicosia,7 3 Horwath HTL l European Hotels & Chains Report

33 : Ranking by size Rank Chain Groups Hotels Rooms Atlantica Hotels 7,73 Louis Hotels 5,33 3 Kanika Olympic 5 93 A. Tsokkos Hotels BRANDS Rank Chain Brands Hotels Rooms Atlantica Hotels 7,73 Louis Hotels 5,33 3 Kanika Olympic Ltd 5 93 A. Tsokkos Hotels : Ranking by scale (all brands) Rank Economy & Midscale Hotels Rooms A. Tsokkos Hotels 36 Atlantica Hotels Kanika Olympic 9 Louis Hotels Rank Upscale & Upper Upscale Hotels Rooms A. Tsokkos Hotels 3 5 Atlantica Hotels Kanika Olympic 3 63 Louis Hotels Rank Luxury Hotels Rooms A. Tsokkos Hotels 9 Atlantica Hotels 59 3 Kanika Olympic 76 Louis Hotels 5 Hilton 9 6 Radisson Blu Horwath HTL l European Hotels & Chains Report 33

34 : Domestic & International brands vs. Europe 3, 3, % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms 3,6 3,5,53, 3, 36,77 373, 39,56 3,5,,7,, 6,96, , 76,33 7,,56 3, 3,9 3,7,567 5,99 Chain hotels Chain rooms : Total of brands per Europe total 3 9 % % Total of brands per European total Total number of brands 3 Horwath HTL l European Hotels & Chains Report

35 : European Chain Penetration.% chain hotels total chain hotels Horwath HTL l European Hotels & Chains Report 35

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37 remains the most visited country in Europe. In 7 there was a 5% year on year growth in visitors, the equivalent of million tourists, which broke the previous record. Philippe Doizelet, Managing Director, Horwath HTL Key Statistics 7 Chain hotels 3,6 Chain rooms 39,56 Average size per chain hotel in rooms Country hotels stock (overall supply),3 Country rooms Stock (overall supply) 659,773 Average size per hotel in rooms 36 Chain penetration % by hotels % Chain penetration % by keys % Total number of brands 7 Domestic brands 5 International brands 55 Second-tier operated hotels 5 International chain hotels (including double counting) 673 Domestic chain hotels (including double counting) 3,6 International chain rooms (including double counting) 53,99 Domestic chain rooms (including double counting) 56,53 Horwath HTL l European Hotels & Chains Report 37

38 : The market was the previous high water mark for French tourism, but several years of terrorist attacks ending in 5/6 had taken the shine off the country. By 7 however, that pent up demand returned with a vengeance creating a record year. Over million tourists came, a 5% increase on the previous year, setting a new record. The tourists mainly came from Northern Europe (Benelux, and ) and from Northern America and Asia. Half of them had an average stay of -3 nights. In, the hotel industry has recorded higher operational performance than 7, with occupancy up.5%. This has benefitted all levels, with a particular emphasis on the high-end range (upper upscale and luxury) that have recorded the highest increase owing to the return of the international clientele. In the first half of, 7 signings were recorded, already 7% of the 7 figures. These signings forecast the opening of,9 rooms out of which 93% are under franchises and 7% under management agreements. A large share of the deals were by chains. Either the local giant, AccorHotels, with 67% of the room inventory and the remainder by IHG, Hilton, Hyatt, and Marriott. Q and Q have recorded 5 openings adding over,5 rooms to the market with % based in Paris itself. Among new brand that opened or are scheduled to open in, most are positioned on the boutique and lifestyle segment including Curio by Hilton, Nhow, Hyatt Place and CR7. Hotel development has evolved in a very enthusiastic climate for the first half of the year, especially for the Paris Region as it concentrated approximately % of rooms signed and of rooms opened in. In this way, prospects for and its capital city are promising for the next five years and are likely to sustain hotel demand for the city. One difficulty remains however in this very positive hotel investment climate: a certain reluctance to sign management contracts that are associated to staff related risk factor. 3 Horwath HTL l European Hotels & Chains Report

39 : Year on year data Key Statistics 6 7 % Diff. Chain hotels 3,9 3,6 -.% Chain rooms 3,7 39,56.9% Average size per chain hotel in rooms 3.% Country hotels stock (overall supply),3,3.3% Country rooms stock (overall supply) 65,36 659,773.% Average size per hotel in rooms 36 36%.% Chain penetration % by hotels % %.% Chain penetration % by keys % %.% Total number of brands 3 7.9% Domestic brands % International brands 5 55.% Second-tier operated hotels 5 5.% International chain hotels (including double counting) % Domestic chain hotels (including double counting) 3,6 3,6.% International chain rooms (including double counting) 53,99 53,99.% Domestic chain rooms (including double counting) 56,53 56,53.% : Key points National hotel champion still leading the way 67% of total rooms signed are affiliated to AccorHotels chain. Mostly under franchise agreement. The region of Paris concentrates a large share of the deal signings for Q & Q % of total hotel rooms signed in, located in the Paris region, in an effort to respond to the growing demand coming from emerging countries. US chains stepping foot into the market % of total rooms signed are affiliated to brands of US origin. Franchises are King Of the new deals being signed, a full 93% are franchise, showing the maturity of the market as owners feel comfortable with the model and the brands on offer. However, more management agreements would be preferable for the brands as they are more lucrative, but staff costs and related expenses are seen as too risky. Big projects start to pay off Various projects and events such as the Grand Paris (urban plan to enhance connectivity within the capital and its suburbs) and the Olympics to be hosted by the capital are placing the city on the map for investors and triggering the interest of international operators who had been quite reserved in their growth strategy in Paris Horwath HTL l European Hotels & Chains Report 39

40 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size Hotels % Rooms Avg. Size Budget & Economy,97 3.% 5,5 7 Midscale,7 53.% 5,35 75 Upscale & Upper-Upscale % 7,63 Luxury 76.% 9, 9 TOTAL 3,7.% 39,69 DOMESTIC Hotels % Rooms Avg. Size Budget & Economy,7 55.7% 63, 6 Midscale 5, %,6 Upscale & Upper-Upscale,76 9.7% 3,376 7 Luxury 3.%,3 67 TOTAL,7.% 6,7 36 : Ranking by location : Primary Demand Driver Rank Destination Hotels Rooms Paris,573,67 Lourdes 5,79 3 Nice 77 9,97 Lyon 7,7 5 Marseille 6, 6 Cannes 3 5,79 7 Toulouse 3 5,66 Roissy-en- - 5, 9 Strasbourg 7,77 Bordeaux 7,7 DRIVER International Domestic Hotels Rooms Hotels Rooms Arts & Business,9 6,67, 33,6 Business Focus,7 7,99 3,6 39 Other Leisure 69,55 3,6 Ski , Sun & Beach 53,55,37 Thermal 7, Horwath HTL l European Hotels & Chains Report

41 : Ranking by size Rank Chain Groups Hotels Rooms AccorHotels,53,93 Louvre Hotels Group 53,7 3 B&B Hotels 76 9,6 Best Western 7,959 5 Appart'City,97 6 IHG 55 7,3 7 Choice Hotels 7, Marriott International 36 6,67 9 Disneyland 6,39 Club Meditérannée 6,35 BRANDS Rank Chain Brands Hotels Rooms Ibis Family 9 75,569 Mercure 3,5 3 B&B Hotels 76 9,6 Campanile 3 9,77 5 Novotel 3 7,56 6 Première Classe 6,7 7 Kyriad 3 3,96 Hotel F 7,975 9 Appart'City,97 Best Western 5,9 Rank Domestic Chain Groups Hotels Rooms AccorHotels,53,93 Louvre Hotels Group 53,7 3 B&B Hotels 76 9,6 Appart'City,97 5 Club Meditérannée 6,35 6 Dynamique Hôtels,7 7 Oceania Hotels 5, Chateauform' 36,75 9 Groupe Barrière 7, Les Hotels de Paris,97 BRANDS Rank Domestic Chain Brands Hotels Rooms Ibis Family 69 7,336 Mercure 3,5 3 B&B Hotels 76 9,6 Campanile 3 9,77 5 Novotel 3 7,56 6 Première Classe 6,7 7 Kyriad 3 3,96 Hotel F 7,975 9 Appart'City,97 Adagio 7 7,67 Rank International Chain Groups Hotels Rooms Best Western 7,959 IHG 55 7,3 3 Choice Hotels 7, Marriott International 36 6,67 5 Disneyland 6,39 6 The Ascott Limited 5,7 7 Carlson Rezidor,7 Hyatt Hotel Corporation 5,76 9 Hilton 7, Starwood Hotels & Resorts 3,33 BRANDS Rank International Chain Brands Hotels Rooms Best Western (Family) 5,9 Disney Hotels 6,39 3 Comfort 73 3,66 Holiday Inn 5 3,7 5 Citadines 5,7 6 Best Western Plus 35,33 7 Radisson Blu 3,33 Marriott 6,93 9 Holiday Inn Express 7,5 Crowne Plaza 7,65 Horwath HTL l European Hotels & Chains Report

42 : Domestic & International brands vs. Europe % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms, 3, 3,6 3,5,53, 3, 36,77 373, 39,56 3,5,,7,, 6,96, , 76,33 7,,56 3, 3,9 3,7,567 5,99 Chain hotels Chain rooms : Total of brands per Europe total 3 9 % % Total of brands per European total Total number of brands Horwath HTL l European Hotels & Chains Report

43 : European Chain Penetration.7% chain hotels 3,6 total chain hotels Horwath HTL l European Hotels & Chains Report 3

44 : Ranking by scale (all brands) Rank Economy & Midscale Hotels Rooms Ibis Family 9 73,569 Mercure 3,5 3 B&B Hotels 76 9,6 Campanile 3 9,77 5 Première Classe 6,7 6 Kyriad 3 3,96 7 Hotel F 7,975 Best Western (Family) 5,9 9 Adagio 7 7,67 Balladins,7 Rank Upscale & Upper Upscale Hotels Rooms Novotel 3 7,56 Appart'City,97 3 Disney Hotels 9 6,39 Club Med 6,35 5 Pullman 3,3 6 Oceania Hotels 5, 7 Radisson Blu 3,33 Marriott 6,93 9 Crowne Plaza 7,65 Hyatt Regency 3,55 Rank Luxury Hotels Rooms Barrière 7, MGallery 7,997 3 Sofitel,63 InterContinental 5,93 5 Four Seasons Concorde Hotels & Resorts 35 7 JW Marriott 6 Sheraton 5 9 Peninsula Raffles 9 : Destination pipeline (-9) PIPELINE Rank Destination Hotel Rooms Paris 66 Bordeaux 7 3 Lyon 37 Mulhouse 5 Nice 35 6 Rouen 7 Nancy 9 Deauville 7 9 Toulouse 7 Marseille 53 Horwath HTL l European Hotels & Chains Report

45 : Ranking by scale (Domestic vs International brands) DOMESTIC Rank Economy & Midscale Hotels Rooms Ibis Family 9 73,569 Mercure 3,5 3 B&B Hotels 76 9,6 Campanile 3 9,77 5 Première Classe 6,7 6 Kyriad 3 3,96 7 Hotel F 7,975 Adagio 7 7,67 9 Balladins,7 Golden Tulip,6 INTERNATIONAL Rank Economy & Midscale Hotels Rooms Best Western (Family) 5,9 Comfort 73 3,66 3 Holiday Inn 5 3,7 Citadines 5,7 5 Best Western Plus 35,33 6 Holiday Inn Express 7,5 7 Quality, Quality Suite Comfort Suites 7 Generator 9 DOMESTIC Rank Upscale & Upper Upscale Hotels Rooms Novotel 3 7,56 Appart'City,97 3 Club Med 6,35 Pullman 3,3 5 Oceania Hotels 5, 6 Chateauform' 36,75 7 Les Maisons du Séminaire 3,37 Les Hotels de Paris 96 9 Okko Hotels Elegancia 5 53 INTERNATIONAL Rank Upscale & Upper Upscale Hotels Rooms Disney Hotels 9 6,39 Radisson Blu 3,33 3 Marriott 6,93 Crowne Plaza 7,65 5 Hyatt Regency 3,55 6 Le Méridien 3,33 7 Hilton 5,7 Courtyard By Marriott 7,3 9 Renaissance,65 AC by Marriott DOMESTIC Rank Luxury Hotels Rooms Barrière 7, MGallery 7,997 3 Sofitel,63 Raffles INTERNATIONAL Rank Luxury Hotels Rooms InterContinental 5,93 Grand Hyatt 9 3 Four Seasons Concorde Hotels & Resorts 35 5 JW Marriott 6 6 Sheraton 5 7 Peninsula Rosewood 7 9 Mandarin Oriental 3 Shangri-La Hotels & Resorts Horwath HTL l European Hotels & Chains Report 5

46

47 These figures show that in the German market, it is really only chain hotels growing at a very rapid pace. The relatively small penetration of % means there is plenty of room for more. Christian Ott-Sessay, Managing Director, Horwath HTL Key Statistics 7 Chains Hotels,7 Chains Rooms 3,5 Average Size per Chain Hotel in Rooms 5 Country Hotels Stock (overall supply) July 7, Country Rooms Stock (overall supply) July 7, Average Size per Hotel in rooms Chain penetration % by hotels.3% Chain penetration % by keys 37.% Total number of brands 3 Domestic Brands 9 International Brands Horwath HTL l European Hotels & Chains Report 7

48 : The market In this second edition of the European Hotels & Chains Report, you can clearly see that the market for chain hotels in is booming and the number of chain/ branded hotels and rooms has strongly increased. Last year the chain penetration was 9.9% for hotels and 35.9% for rooms, whereas in 7 these numbers rose to.3% and 37.%. This move towards an brand or affiliation is a.% increase in the total number of chain hotels (up to,7) and a 5.% increase in the total number of chain rooms (up,7 to 3,5) over the previous year. The growth of chain hotels consists partly of existing chain companies and their various brands increasing as well as some new domestic players entering the market. These include brands such as Novum s Niu, Loginn by ACHAT and HYPERION (Hospitality Alliance). New international brands like the Japanese Tokyo Inn or the US-American Hyatt House and Hyatt Place have opened hotels for the first time in. Nevertheless, the German market in total is still mostly made up of independent hotels. Fully 9.7% of s total hotel stock (, hotels with, rooms) are single assets or small groups that do not meet the chain criteria. Horwath HTL l European Hotels & Chains Report

49 : Year on year data Key Statistics 6 7 % Diff. Chain hotels,99,7.% Chain rooms 6,775 3,5 5.% Average size per chain hotel in rooms 5.6% Country hotels stock (overall supply),, -.% Country rooms stock (overall supply) 79,65,.7% Average size per hotel in rooms.% Chain penetration % by hotels 9.9%.3%.5% Chain penetration % by keys 35.9% 37.% 3.3% Total number of brands % Domestic brands 9 9.9% International brands 5.6% : Key points The biggest casualty in the report is Wyndham hotel, which were number in our top ten ranking, but have all but disappeared. This is due to the 3 former Ramada branded Wyndham hotels, which were franchised by their sales partner Hospitality Alliance (H-Hotel Group) are now running under Hospitality Alliances own brands. This means that, with an increase of more than 5, rooms, Hospitality Alliance now occupies 5th rank, up from 9th the year before in the TOP domestic chain groups Finally, we need to mention the domestic brand Motel One. In the last year, the group recorded an increase of,976 rooms in four additional hotels moving closer to Deutsche Hospitality, which is s first placed domestic chain group for the second year in a row. These figures show that now only are chain hotels growing at a very rapid pace, the relatively small penetration of % means there is plenty of room for more. Another strong player in the German market is B&B. In just one year, the group s German portfolio has risen by,3 rooms across hotels. Currently, the group is running hotels in and according to Managing Director Max Luscher, B&B plans to expand its German stock to 5 hotels by. Horwath HTL l European Hotels & Chains Report 9

50 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size CHAIN HOTELS CHAIN ROOMS Hotels % Rooms Avg Size Intl. Dom. Intl. Dom. Budget & Economy 39.%, ,33,9 Midscale 6 3.%, ,5 3,7 Upscale & Upper-Upscale 93.% 7, ,33 6,75 Luxury 9 5.%, ,97 9,7 TOTAL,7.% 3,5 5, 36,5 6, : Ranking by location : Primary Demand Driver Rank Destination Hotels Rooms Berlin 6 3,559 Munich 3 5,373 3 Frankfurt / M 9,76 Hamburg 5,7 5 Dusseldorf 76,536 6 Cologne 66,69 7 Dresden 3 7,63 Stuttgart 7,55 9 Leipzig 6,66 Nuremberg 3 5, DRIVER International Domestic Hotels Rooms Hotels Rooms Arts & Business 6,3 37,9 Business Focus 566 7,66,55 Other Leisure, 3, Mountain (Ski) 7,65 3,79 Sun & Beach 9, ,95 Thermal,36 37,339 5 Horwath HTL l European Hotels & Chains Report

51 : Ranking by size Rank Chain Groups Hotels Rooms Accor 366,796 Best Western 3,656 3 Marriott International 6 6,7 IHG 73, 5 Deutsche Hospitality / Steigenberger Hotels 76 3,655 6 Motel One, 7 B&B Hotels,5 NH Hotel Group 57,65 9 Maritim Hotelgesellschaft 33 9,67 Carlson Rezidor 3 9, BRANDS Rank Chain Brands Hotels Rooms Mercure 5,39 Motel One, 3 Best Western 3,7 IBIS 7,67 5 B&B Hotels,5 6 Maritim 33 9,67 7 Ibis Budget, NH Hotel 9,5 9 Steigenberger Hotels & Resorts 3 7,3 IntercityHotels 3 6,63 Rank Domestic Chain Groups Hotels Rooms Deutsche Hospitality / Steigenberger Hotels 76 3,655 Motel One, 3 Maritim Hotelgesellschaft 33 9,67 Novum Group 95,36 5 Hospitality Alliance/ H-Hotel 7 7,599 6 Dorint 36 6,5 7 A&O Hotels & Hostels 5,93 Achat Hotel 3,63 9 Lindner Hotels 3,35 Centro Hotel,77 BRANDS Rank Domestic Chain Brands Hotels Rooms Motel One, Maritim 33 9,67 3 Steigenberger Hotels & Resorts 3 7,3 IntercityHotels 3 6,63 5 Dorint Hotels & Resorts 36 6,5 6 Novum Hotels 76 6, 7 A&O Hotels And Hostels 5,93 H+ Hotels 3 3,96 9 Lindner Hotels & Resorts 3 3,5 Dormero Hotels 7,7 Rank International Chain Groups Hotels Rooms Accor 366,796 Best Western 3,656 3 Marriott International 6 6,7 IHG 73, 5 B&B Hotels,5 6 NH Hotel Group 57,65 7 Carlson Rezidor 3 9, Wyndham Hotel Group 6, 9 Fattal Hotels 5 7,757 Hilton Worldwide 5 7,3 BRANDS Rank International Chain Brands Hotels Rooms Mercure 5,39 Best Western 3,7 3 IBIS 7,67 B&B Hotels,5 5 Ibis Budget, 6 NH Hotel 9,5 7 Holiday Inn 7 6, Radisson Blu 5,9 9 Leonardo Hotels 36 5,7 Holiday Inn Express 35 5,3 Horwath HTL l European Hotels & Chains Report 5

52 : Domestic & International brands vs. Europe % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms, 3, 3,6 3,5,53, 3, 36,77 373, 39,56 3,5,,7,, 6,96, , 76,33 7, Chain hotels Chain rooms : Total of brands per Europe total ,56 3, 3,9 3,7,567 5,99 % 7 6 % Total of brands per European total Total number of brands 5 Horwath HTL l European Hotels & Chains Report

53 : European Chain Penetration.3% chain hotels,7 total chain hotels : Business Model HOTELS Economy (includes Budget) Franchising % Lease % Management contract % Owned % Total % 79 5% 7 57% % 55 % 3 % Midscale 5 57% 35% 3 % 6 7% 359 % Upscale & Upper-Upscale 37 5% 6 35% 6 % % 99% Luxury 6 3% 9 3% 5 3% % 5 % Total 537 % 67 % 3 3% 9 %,9 % * The TOP Chain Groups represent 56% of the collected data Horwath HTL l European Hotels & Chains Report 53

54 : Ranking by scale (all brands) BRANDS Rank Economy & Midscale Hotels Rooms Mercure 5,39 Motel One, 3 IBIS 7,67 B&B Hotels,5 5 Ibis Budget, 6 Holiday Inn Express 35 5,3 7 Best Western 5 5,77 A&O Hotels And Hostels 5,93 9 Novotel,5 Novum Hotels 59,5 BRANDS Rank Upscale & Upper Upscale Hotels Rooms Maritim 33 9,67 NH Hotel 6 7,9 3 Best Western 69 6,567 Holiday Inn 5 6, 5 Radisson Blu 5,69 6 Leonardo Hotels 3,7 7 Dorint Hotels & Resorts 7,777 IntercityHotels 3,9 9 Best Western Plus 36, Steigenberger Hotels & Resorts 3,5 BRANDS Rank Luxury Hotels Rooms Steigenberger Hotels & Resorts 7 3,9 Kempinski 9,9 3 Westin Hotels & Resorts,6 Hilton,6 5 Sheraton 3,563 6 Marriott 3,33 7 Intercontinental Hotels & Resorts 3,3 Sofitel 6,6 9 Le Meridien, Dorint Hotels & Resorts 6,6 : Destination pipeline (-9) PIPELINE Rank Destination Hotels Rooms Munich 3 6,96 Hamburg 5,6 3 Berlin,639 Frankfurt,3 5 Stuttgart,9 6 Düsseldorf,7 7 Leipzig,7 Mannheim 9,53 9 Cologne 5 97 Kiel 6 5 Horwath HTL l European Hotels & Chains Report

55 : Ranking by scale (Domestic vs International brands) DOMESTIC Rank Economy & Midscale Hotels Rooms Motel One, A&O Hotels And Hostels 5,93 3 Novum Hotels 59,5 IntercityHotels 5,3 5 Meininger Hotels,573 6 Centro Hotels 7,93 7 Star Inn Hotels,3 Morada Hotels & Resorts,6 9 Achat Comfort, Ghotel Hotel & Living 7,57 INTERNATIONAL Rank Economy & Midscale Hotels Rooms Mercure 5,39 IBIS 7,67 3 B&B Hotels,5 Ibis Budget, 5 Holiday Inn Express 35 5,3 6 Best Western 5 5,77 7 Novotel,5 Ibis Styles 3,35 9 Tryp Hotels 3,75 Moxy Hotels 7,57 DOMESTIC Rank Upscale & Upper Upscale Hotels Rooms Maritim 33 9,67 Dorint Hotels & Resorts 7,777 3 IntercityHotels 3,9 Steigenberger Hotels & Resorts 3,5 5 H+ Hotels 3,7 6 Lindner Hotels & Resorts,9 7 Dormero Hotels 7,7 Pentahotels,36 9 H Hotels 9,3 Novum Hotels 7,57 INTERNATIONAL Rank Upscale & Upper Upscale Hotels Rooms NH Hotel 6 7,9 Best Western 69 6,567 3 Holiday Inn 5 6, Radisson Blu 5,69 5 Leonardo Hotels 3,7 6 Best Western Plus 36, 7 Hilton,97 Best Western Premier,5 9 Courtyard Marriott,57 Park Inn By Radisson 9,7 DOMESTIC Rank Luxury Hotels Rooms Steigenberger Hotels & Resorts 7 3,9 Kempinski 9,9 3 Dorint Hotels & Resorts 6,6 A-Rosa Althoff Hotel Collection 7 6 Fleming's Hotels & Restaurants 35 7 Neptun 33 Dr. Lohbeck Privathotels 3 9 Hyperion Hotels 35 Vila Vita Hotels 9 INTERNATIONAL Rank Luxury Hotels Rooms Westin Hotels & Resorts,6 Hilton,6 3 Sheraton 3,563 Marriott 3,33 5 Intercontinental Hotels & Resorts 3,3 6 Sofitel 6,6 7 Le Meridien, Hyatt Regency Radisson Blu 65 The Ritz-Carlton 73 Horwath HTL l European Hotels & Chains Report 55

56

57 Demand growth for hotels in the capital, Budapest, is driven by the traditional US and European markets. A surge in leisure travellers from Asian markets is contributing to a shift in traveller profiles which means the products also need to evolve to meet the new requirements. It certainly feels like is now on the map and demand reflects that. Marius Gomola, Managing Director, Horwath HTL Key Statistics 7 Chain hotels Chain rooms,567 Average size per chain hotel in rooms 7 Country hotels stock (overall supply),3 Country rooms Stock (overall supply) 6,5 Average size per hotel in rooms 57 Chain penetration % by hotels 3% Chain penetration % by keys 33% Total number of brands 5 Domestic brands 6 International brands 39 Second-tier operated hotels 35 International chain hotels (including double counting) 5 Domestic chain hotels (including double counting) International chain rooms (including double counting) 9,67 Domestic chain rooms (including double counting),3 Horwath HTL l European Hotels & Chains Report 57

58 : The market Demand growth for hotels in the capital is driven by the traditional US and European markets, while the diversity of the traveller profiles is equally contributed to the surge from Asian markets primarily for leisure purposes. Budapest is still a very popular destination for young adults enjoying the party and club scene, however cultural tourists from overseas markets diversify the leisure segment. Corporate and MICE perform equally well due to the strong economic growth in the country. has a relatively high chain penetration index by keys (33.3%). The number of chain rooms increased by 3.3% in 7, reaching a total of,567 rooms in hotels. With the opening of the Park Inn by Radisson in Zalakaros, the presence of the Radisson Hotel Group has significantly grown and is currently ranked among the international chain hotel groups in to be the third in terms of number of hotel rooms. Further hotel openings in 7 included the two new properties of The Three Corners Hotels & Resorts group, and Meininger is opening in. New brands are in the pipeline, and we expect Hyatt to return to with two brands, while the first Hilton Garden Inn and The Luxury Collection by Marriott are scheduled to open in 9. In 7 the total number of brands increased from 3 to 5 in with the entry of two international hotels in the market: EXE Hotel (Hotusa Group) and Golden Park Hotel by Novum Hotels. 5 Horwath HTL l European Hotels & Chains Report

59 : Year on year data Key Statistics 6 7 % Diff. Chain hotels 3.5% Chain rooms 9,9, % Average size per chain hotel in rooms % Country hotels stock (overall supply),7,3.% Country rooms stock (overall supply) 6,369 6,5.7% Average size per hotel in rooms % Chain penetration % by hotels 3% 3% 3.% Chain penetration % by keys 3% 33%.% Total number of brands 5.3% Domestic brands 6 6.% International brands % Second-tier operated hotels % International chain hotels (including double counting) 5 5.5% Domestic chain hotels (including double counting).% International chain rooms (including double counting) 9,7 9,67 -.% Domestic chain rooms (including double counting),73,3 6.9% : Key points Locals winning but for how long? The top two chain groups are local companies, Danubius hotel group with hotels and,96 rooms followed by Hunguest Hotels also with hotels, but less rooms with 3,339 rooms. Hot on their heels though are French giant Accor with 7 hotels and 3,7 rooms. How long will it be before they take top spot? Gap in the market for budget brands? Like many other markets and a good indicator of where the majority of chain products are positioned, upper and upper upscale (/5 stars) hotels make up the most chain supply in on 5.6%. Budapest is s London Like London, Budapest crushes all before it. The city has,9 chain affiliated hotel rooms, a cool, more than the next location Hévíz. Business Models Unlike their near neighbours, Hungarian investors are much more comfortable with other forms of ownership and agreements. Owner operator is still the largest method, with 6% of chain hotels. This is followed by Management agreement on 3% or hotels, with leases on 3% and franchises %. Next up is midscale properties on 9%. % of chain hotels are luxury and only.% budget. Considering how successful these budget hotels have been in, the and, maybe this is the next growth segment? Horwath HTL l European Hotels & Chains Report 59

60 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size : Primary Demand Driver Hotels % Rooms Avg. Size Budget & Economy 3.% Midscale 9.3%,669 Upscale & Upper-Upscale 5.6%,3 5 Luxury.% 3,3 TOTAL.%,567 7 DRIVER International Domestic Hotels Rooms Hotels Rooms Arts & Business 55 9,3 3,95 Business Focus Other Leisure Sun & Beach - -,369 Thermal 3 3,6 Wine : Ranking by location Rank Destination Hotels Budapest 79 Hévíz 5 3 Bükfürdő Hajdúszoboszló 5 Siófok 6 Szeged 7 Zalakaros Győr 3 9 Balatonfüred Gyula Rank Destination Rooms Budapest,9 Hévíz 9 3 Bükfürdő 75 Balatonfüred 69 5 Hajdúszoboszló Zalakaros 7 7 Szeged 6 Sárvár Győr 35 Gyula 33 6 Horwath HTL l European Hotels & Chains Report

61 : Ranking by size Rank Chain Groups Hotels Rooms Danubius Hotels Group,96 Hunguest Hotels 3,339 3 AccorHotels 7 3,7 Marriott 6,365 5 Accent Hotel Management 6,39 6 ServiceYou Mellow Mood Hotels 57 Carlson Rezidor IHG 566 Corinthia Hotels BRANDS Rank Chain Brands Hotels Rooms Danubius,39 Hunguest 3,339 3 Accent 5 63 Mercure Novotel Mellow Mood 57 7 Park Inn By Radisson Ibis Hilton 55 ServiceYou 9 5 Rank Domestic Chain Groups Hotels Rooms Danubius Hotels Group,96 Hunguest Hotels 3,339 3 Accent Hotel Management 6 39 ServiceYou Mellow Mood Hotels BRANDS Rank Domestic Chain Brands Hotels Rooms Danubius,39 Hunguest 3,339 3 Accent 5 63 Mellow Mood 57 5 ServiceYou Optimum Hotels Rank International Chain Groups Hotels Rooms AccorHotels 7 3,7 Marriott 6,365 3 Radisson Hotel Group IHG Hilton Hotels & Resorts 55 6 Corinthia Hotels 7 Kempinski 35 Eurostars Hotels 76 9 Novum Hotels 6 K+K BRANDS Rank International Chain Brands Hotels Rooms Mercure 3,3 Novotel Park Inn by Radisson Ibis Hilton 55 6 Corinthia 7 Intercontinental Marriott 36 9 Sofitel 357 Kempinski 35 Horwath HTL l European Hotels & Chains Report 6

62 : Domestic & International brands vs. Europe % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms, 3, 3,6 3,5,53, 3, 36,77 373, 39,56 3,5,,7,, 6,96, , 76,33 7, Chain hotels Chain rooms : Total of brands per Europe total ,56 3, 3,9 3,7,567 5,99 % 7 6 % Total of brands per European total Total number of brands 6 Horwath HTL l European Hotels & Chains Report

63 : European Chain Penetration % chain hotels total chain hotels : Business Model HOTELS Franchising % Lease % Management contract % Owned % Total % Economy 33% 33% 33% % 3 % Midscale 5 % % % 5 6% % Upscale & Upper-Upscale % 3 6% 9% 37 5% % Luxury % 3 % 7 5% % % Total 6 % 3% 3% 6 6% % ROOMS Franchising % Lease % Management contract % Owned % Total % Economy 59 35% 7 % 63 37% % 69 % Midscale 656 % 37 % 65 % 333 7% 669 % Upscale & Upper-Upscale 6 % 77 % 65 5% 77 59% 3 % Luxury 6 9% 59 5% 765 5% 63 % 33 % Total 75 % 363 % 33 % 5% 567 % Horwath HTL l European Hotels & Chains Report 63

64 : Ranking by scale (all brands) Rank Economy & Midscale Hotels Rooms Hunguest,76 Danubius 96 3 Ibis 5 5 Accent 33 5 Mellow Mood Optimum Hotels Ibis Styles 6 Star Inn 5 9 The Three Corners ServiceYou 6 Rank Upscale & Upper Upscale Hotels Rooms Danubius 3, Hunguest 9,63 3 Mercure 3,3 Novotel Accent 6 Park Inn by Radisson ServiceYou Mellow Mood Radisson Blu 7 Courtyard by Marriott 3 Rank Luxury Hotels Rooms Hilton 55 Corinthia 3 Intercontinental Marriott 36 5 Sofitel Kempinski 35 7 Autograph Collection/ Dedica Anthology 33 Ritz Carlton 9 Four Seasons 79 BuddhaBar : Destination pipeline (-) PIPELINE Rank Destination Hotels Rooms Budapest 33,39 Nyíregyháza 3 Pannonhalma 99 Bük 7 5 Esztergom 69 6 Kisvárda 5 7 Mezőkövesd 7 Szikszó 6 Horwath HTL l European Hotels & Chains Report

65 : Ranking by scale (Domestic vs International brands) DOMESTIC Rank Economy & Midscale Hotels Rooms Hunguest,76 Danubius 96 3 Mellow Mood Accent 33 5 Optimum Hotels ServiceYou INTERNATIONAL Rank Economy & Midscale Hotels Rooms Ibis 5 5 Ibis Styles 6 3 Star Inn 5 The Three Corners 5 EasyHotel 59 6 Novum Hotels DOMESTIC Rank Upscale & Upper Upscale Hotels Rooms Danubius 3, Hunguest 9,63 3 Accent ServiceYou 5 Mellow Mood Optimum Hotels INTERNATIONAL Rank Upscale & Upper Upscale Hotels Rooms Mercure 3,3 Novotel Park Inn by Radisson Radisson Blu 7 5 Courtyard by Marriott 3 6 K+K 7 Leonardo Novum Hotels 79 9 Eurostars 75 Art otel 65 DOMESTIC Rank Luxury Hotels Rooms Mellow Mood Accent INTERNATIONAL Rank Luxury Hotels Rooms Hilton 55 Corinthia 3 Intercontinental Marriott 36 5 Sofitel Kempinski 35 7 Autograph Collection/ Boscolo 33 Ritz Carlton 9 Four Seasons 79 Iberostar 5 Horwath HTL l European Hotels & Chains Report 65

66

67 We are estimating that over,3 new bedrooms will open in the capital city before the end of, marking the largest annual increase in supply in the Dublin market in the last years Naoise Cosgrove, Managing Director, Horwath HTL Key Statistics 7 Chain hotels 3 Chain rooms 3,7 Average size per chain hotel in rooms 3 Country hotels stock (overall supply) Country rooms Stock (overall supply) 5,333 Average size per hotel in rooms 7. Chain penetration % by hotels.3% Chain penetration % by keys.9% Total number of brands 3 Domestic brands International brands 3 Second-tier operated hotels 5 International chain hotels (including double counting) Domestic chain hotels (including double counting) 5 International chain rooms (including double counting) 6,9 Domestic chain rooms (including double counting),39 Horwath HTL l European Hotels & Chains Report 67

68 : The market 7 was a record year for the Irish tourism sector, with over 9.9 million overseas trips to (+3.6% on 6). During 7, there was limited growth in the supply of hotel rooms. However, the market is in the early stages of a development phase and a number of new hotels are anticipated to open in, principally in Dublin. As hotels continue to trade profitably, we expect to see continued investment in properties, improving the quality of assets even further. % of the bed supply in form part of a chain. The market is made up primarily of domestic chains, 6% of all hotels and 7% of Dublin hotels. We are estimating that over,3 (+6.7%) new bedrooms will open in the capital city before the end of, marking the largest annual increase in supply in the Dublin market in the last years. The new rooms will predominantly be branded and will include new hotel additions to the Dalata and Starwood hotel groups, as well as extensions to Hilton, Hilton Garden Inn and Premier Inn hotels. The largest chains remain Dalata Hotel Group plc, followed by Goldman Sachs backed Tifco. After Dalata s Clayton and Maldron brands, the next largest brand represented in is Radisson, which has seen its portfolio reduce following the sale and rebranding of the Farnham Estate. Over the next number of years, we expect to see the number of branded rooms increase as new supply enters the market, particularly from chain hotels. 6 Horwath HTL l European Hotels & Chains Report

69 : Year on year data Key Statistics 6 7 % Diff. Chain hotels % Chain rooms,69 3,7 6.3% Average size per chain hotel in rooms % Country hotels stock (overall supply).% Country rooms stock (overall supply) 57,3 5,333.9% Average size per hotel in rooms 7 7.% Chain penetration % by hotels % % 7.% Chain penetration % by keys 39% % 5.% Total number of brands % Domestic brands % International brands % Second-tier operated hotels 5 5.% International chain hotels (including double counting).% Domestic chain hotels (including double counting) % International chain rooms (including double counting) 6,37 6,9 -.5% Domestic chain rooms (including double counting),937,39 7.5% : Key points Dublin big and getting bigger Dublin towers over all the other Irish markets in terms of chain supply, with 65 hotels with,3 rooms. The next closest is Cork with hotels but only,79 rooms. This does not include the estimated,3 bedrooms set to open in Dublin this year. Size and Scale Like most EU markets, the 3 and star segment, or upper and upper upscale brands represent most of the chain affiliated hotels making up to 9.% of the hotel stock. In terms of actual rooms though they are beaten into second place by Midscale or 3 star properties which make up.% of the total inventory with upper and upper upscale accounting for.%. Luxury hotels represent 5 properties,.% of the market counted as the top tier. Brands is a small market which has recovered from a severe recession and is now undergoing a consistent period of growth and recovery. At the moment Irish branded properties equate to % of the total number of brands in Europe with one of the lower levels, 3%, of international brand presentation. This shows the potential opportunities for new brands to enter the market. Horwath HTL l European Hotels & Chains Report 69

70 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size Hotels % Rooms Avg. Size Budget & Economy 3.6% 7 76 Midscale 75.% 7,73 3 Upscale & Upper-Upscale 9 9.% 3, Luxury 5.%,6 TOTAL 3.% 3,7 3 DOMESTIC Hotels % Rooms Avg. Size Budget & Economy %,77 Midscale 37.%,6 6 Upscale & Upper-Upscale % 3, Luxury 36.%, 6 TOTAL.% 5,333 7 : Ranking by location Rank Destination Hotels Rooms Dublin 65,37 Cork,79 3 Galway,7 Limerick 9,7 5 Killarney 96 7 Horwath HTL l European Hotels & Chains Report

71 : Ranking by size Rank Chain Groups Hotels Rooms Dalata Hotel Group 9 5,9 Tifco,3 3 MHL Hotel Collection,75 Great National Hotels 3,637 5 Rezidor Hotel Group,559 6 Tetrarch 7,66 7 Windward Management,55 IHG 7,3 9 McGettigan Hotels 9,5 Amaris Hospitality BRANDS Rank Chain Brands Hotels Rooms Clayton 3,65 Maldron,66 3 Radisson 9,5 Travelodge Jurys Inn 69 6 Crowne Plaza Treacys Hotel Group 5 Hilton Great National Hotels 7 Talbot 3 3 Rank Domestic Chain Groups Hotels Rooms Dalata Hotel Group 9 5,9 Tifco,3 3 MHL Hotel Collection,75 Great National Hotels 3,637 5 Rezidor Hotel Group,559 6 Tetrarch 7,66 7 Windward Management,55 McGettigan Hotels 9,5 9 Amaris Hospitality BRANDS Rank Domestic Chain Brands Hotels Rooms Clayton 3,65 Maldron,66 3 Jurys Inn 69 Treacys Hotel Group 5 5 Great National Hotels 7 6 Talbot Rank International Chain Groups Hotels Rooms Rezidor Hotel Group,559 IHG 7,3 3 Hilton 5 9 Marriott International Choice Hotel International BRANDS Rank International Chain Brands Hotels Rooms Radisson 9,5 Travelodge Crowne Plaza 3 5 Hilton Riu Horwath HTL l European Hotels & Chains Report 7

72 : Domestic & International brands vs. Europe % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms, 3, 3,6 3,5,53, 3, 36,77 373, 39,56 3,5,,7,, 6,96, , 76,33 7, Chain hotels Chain rooms : Total of brands per Europe total ,56 3, 3,9 3,7,567 5,99 % 7 6 % Total of brands per European total Total number of brands 7 Horwath HTL l European Hotels & Chains Report

73 : European Chain Penetration.% chain hotels 3 total chain hotels Horwath HTL l European Hotels & Chains Report 73

74 : Ranking by scale (all brands) Rank Economy & Midscale Hotels Rooms Maldron 36 Travelodge Jurys Inn 69 Treacys Hotel Group Holiday Inn Express 3 6 Great National Hotels Rank Upscale & Upper Upscale Hotels Rooms Clayton 365 Radisson 9 3 Crowne Plaza 3 5 Hilton Maldron Rank Luxury Hotels Rooms Renaissance Hotels 66 IHG 97 3 Autograph Collection 9 Conrad Hotels and Resorts 9 5 Westin Horwath HTL l European Hotels & Chains Report

75 : Ranking by scale (Domestic vs International brands) DOMESTIC Rank Economy & Midscale Hotels Rooms Maldron,36 Jurys Inn 69 3 Treacys Hotel Group 3 33 Great National Hotels INTERNATIONAL Rank Economy & Midscale Hotels Rooms Travelodge 766 Holiday Inn Express 3 3 Hilton Garden Inn 39 Premier Inn 55 5 Ibis Hotel DOMESTIC Rank Upscale & Upper Upscale Hotels Rooms Clayton 3,65 Maldron Talbot 3 3 Great National Hotels Treacys Hotel Group INTERNATIONAL Rank Upscale & Upper Upscale Hotels Rooms Radisson,9 Crowne Plaza Hilton 3 79 Riu DOMESTIC Rank Luxury Hotels Rooms INTERNATIONAL Rank Luxury Hotels Rooms Renaissance Hotels 66 InterContinental Hotels and Resorts 97 3 Autograph Collection 9 Conrad Hotels and Resorts 9 5 Westin 7 6 Radisson Horwath HTL l European Hotels & Chains Report 75

76

77 Don t underestimate the size of the Italian market and the strength of Italian domestic chains which, at 37 is second only to in size. Zoran Bačić, Managing Director, Horwath HTL Key Statistics 7 Chain hotels, Chain rooms 6,96 Average size per chain hotel in rooms Country hotels stock (overall supply) 33,66 Country rooms Stock (overall supply),9,6 Average size per hotel in rooms 33 Chain penetration % by hotels 5% Chain penetration % by keys 5% Total number of brands 7 Domestic brands 37 International brands 9 Second-tier operated hotels 69 International chain hotels (including double counting) 53 Domestic chain hotels (including double counting),3 International chain rooms (including double counting) 65,965 Domestic chain rooms (including double counting) 7, Horwath HTL l European Hotels & Chains Report 77

78 : The market is often cited as one of the most famous countries with the lowest proliferation of international brands, and this is true, with overall chain penetration accounting for only 5% of total hotel supply, and 5% of rooms. Certainly compared to other giants like with % or with 33% it is relatively small, but that underestimates the size of the market and the strength of their domestic chains which, at 37 is second only to in Europe. Of the Chain hotels that has, the vast majority (65%) are in the upscale and upper upscale segment, with 3% in the midscale section and.9% Luxury. There are hardly any budget and economy brands (.5%) which is not surprising considering the vast numbers of independent hotels. In terms of performance, 7 was an excellent year for Italian hotels. Over the year, occupancy rates in rose by % and average room rates rose by.% leading to a very healthy % increase in revenue per average room rates. This was driven by a record year in arrivals, not least of which the capital Rome, which saw an increase in both domestic and International visitors at 5.9 and.75 million arrivals respectively. Other key markets experienced similar increases, Venice went up from just over 3 million to almost million in 7, Florence grew from just over million to over.6 million 7 Horwath HTL l European Hotels & Chains Report

79 : Year on year data Key Statistics 6 7 % Diff. Chain hotels,, 6.% Chain rooms 55,55 6,96 5.6% Average size per chain hotel in rooms -.9% Country hotels stock (overall supply) 33,99 33,66 -.% Country rooms stock (overall supply),9,569,9,6.% Average size per hotel in rooms % Chain penetration % by hotels % 5% 7.% Chain penetration % by keys % 5% 5.6% Total number of brands 7.3% Domestic brands 37.5% International brands 9.5% Second-tier operated hotels % International chain hotels (including double counting) % Domestic chain hotels (including double counting) 95,3.7% International chain rooms (including double counting) 6, 65,965.6% Domestic chain rooms (including double counting),559 7, 7.3% : Key points Development Hotspots Verona, Naples and Palermo (and Sicily in general) are attracting the curiosity of developers and are considered to be top of the priority list for new development. Franchising on the horizon for Domestic chains Domestic chains will possibly start a franchising in to 3 years from now as the market starts accepting the model and brands are established enough. Different financial tools for international and domestic chains to use International hotel chains will continue to grow in the near future, primarily thanks to franchising. For Domestic chains the lease model is the most likely vehicle for growth as owners have strong covenant and banks are comfortable with the model. Mergers and Acquisitions not done The last couple of years has seen a huge cycle of M&A activity internationally, with relatively small amounts in. It s likely that has not seen the last of these transactions, with some of the larger domestic players looking to consolidate their positions by snapping up rivals. Horwath HTL l European Hotels & Chains Report 79

80 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size Hotels % Rooms Avg. Size Budget & Economy 3.5%,73 5 Midscale 3.9% 7,559 Upscale & Upper-Upscale %, 3 Luxury 6.9% 7,3 7 TOTAL, % 6,96 Hotels Rooms Intl. Dom. Intl. Dom Budget & Economy Midscale,39 7,6 Upscale & Upper-Upscale ,555 79,55 Luxury ,3 9, Total 6,6 57,33 6,6 : Primary Demand Driver DRIVER International Domestic Hotels Rooms Hotels Rooms Art & Business 3 3,9 36,593 Business Focus 67,5 7 5,79 Golf 79 3,75 Other Leisure 6 6,7 55, Ski 5,6 76 6,5 Sun & Beach 7,69 375,3 Thermal,69 Horwath HTL l European Hotels & Chains Report

81 : Ranking by size Rank Chain Groups Hotels Rooms Best Western 9,36 Accor 79,3 3 Marriott International 5 9,673 NH Hotels 5 7,7 5 Gruppo Una 3 5,56 6 Valtur,7 7 IHG 3,6 Hilton,639 9 Iti Hotels 37,356 Starhotels 3,669 BRANDS Rank Chain Brands Hotels Rooms Best Western,5 NH Hotels 39 6, 3 Valtur,7 Blu Hotels 3 3,369 5 Mercure 9 3,9 6 Aeroviaggi 3,3 7 TH Resorts 7 3,37 Bluserena 3,3 9 B&B 3,9 Starhotels Premium 7,77 Rank Domestic Chain Groups Hotels Rooms Gruppo Una 3 5,56 Valtur,7 3 Iti Hotels 37,356 Starhotels 3,669 5 Blu Hotels 3 3,369 6 Aeroviaggi 3,3 7 Th Resorts 7 3,37 Bluserena 3,3 9 IH Hotels 6,65 JSH,57 BRANDS Rank Domestic Chain Brands Hotels Rooms Valtur,7 Blu Hotels 3 3,369 3 Aeroviaggi 3,3 TH Resorts 7 3,37 5 Bluserena 3,3 6 Starhotels Premium 7,77 7 Atahotels 3,66 Iti Hotels-Marina H&R,6 9 JSH,57 Una Hotels & Resorts 5,9 Rank International Chain Groups Hotels Rooms Best Western 9,36 Accor 79,3 3 Marriott International 5 9,673 NH Hotels 5 7,7 5 IHG 3,6 6 Hilton,639 7 B&B 3,9 Club Med,6 9 Louvre 7,39 Choice Hotels 3, BRANDS Rank International Chain Brands Hotels Rooms Best Western,5 NH Hotels 39 6, 3 Mercure 9 3,9 B&B 3,9 5 Sheraton 7,3 6 Holiday Inn 5,39 7 Novotel 3, Hilton 6,65 9 Best Western Plus,99 Ibis,75 Horwath HTL l European Hotels & Chains Report

82 : Domestic & International brands vs. Europe % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms, 3, 3,6 3,5,53, 3, 36,77 373, 39,56 3,5,,7,, 6,96, , 76,33 7, Chain hotels Chain rooms : Total of brands per Europe total ,56 3, 3,9 3,7,567 5,99 % 7 6 % Total of brands per European total Total number of brands Horwath HTL l European Hotels & Chains Report

83 : European Chain Penetration 5% chain hotels, total chain hotels : Ranking by location Rank Destination Hotels Rome 75 Milan 5 3 Florence 6 Venice 55 5 Rimini 36 6 Bologna 7 Turin Genoa 9 9 Naples 6 Milano Marittima - Cervia 5 Rank Destination Rooms Rome,67 Milan,9 3 Venice 5,57 Florence,67 5 Bologna 3, 6 Naples,35 7 Turin,337 Genoa,39 9 Budoni,9 Taormina,76 Horwath HTL l European Hotels & Chains Report 3

84 : Ranking by scale (all brands) Rank Economy & Midscale Hotels Rooms B&B 3,9 Ibis,75 3 Best Western,695 Club Med 3,5 5 Valtur 5,3 6 Geturhotels 7,33 7 Chincherini Holiday Group,7 Ibis Styles 96 9 Th Resorts 5 5 Aeroviaggi 77 Rank Upscale & Upper Upscale Hotels Rooms Best Western 6,559 NH Hotels 39 6, 3 Bluserena 3,3 Mercure 7 3,39 5 Valtur 3,3 6 Blu Hotels,99 7 Starhotels Premium 7,77 Atahotels, 9 Aeroviaggi, Iti Hotels-Marina H&R 9,395 Rank Luxury Hotels Rooms Luxury Collection 95 Westin 99 3 Mgallery By Sofitel 5 65 NH Collection Autograph Marriott Gb Thermae Hotels Delphina 3 5 Iti Hotels- Colonna Luxury Boscolo 3 5 Select 3 5 Horwath HTL l European Hotels & Chains Report

85 : Ranking by scale (Domestic vs International brands) DOMESTIC Rank Economy & Midscale Hotels Rooms Valtur 5,3 Geturhotels 7,33 3 Chincherini Holiday Group,7 Th Resorts Aeroviaggi 77 6 Bianchi Hotels 75 7 Rimini Residence 63 Apogia Hotels Group 6 9 Meditur 63 Aurum INTERNATIONAL Rank Economy & Midscale Hotels Rooms B&B 3,9 Ibis,75 3 Best Western,695 Club Med 3,5 5 Ibis Styles 96 6 Holiday Inn Express Tulip Inn 5 A&O Hotels & Hostels 39 9 Mercure Moxy 6 DOMESTIC Rank Upscale & Upper Upscale Hotels Rooms Bluserena 3,3 Valtur 3,3 3 Blu Hotels,99 Starhotels Premium 7,77 5 Atahotels, 6 Aeroviaggi, 7 Iti Hotels-Marina H&R 9,395 Ih Hotels,37 9 Th Resorts,33 Una Hotels & Resorts,7 INTERNATIONAL Rank Upscale & Upper Upscale Hotels Rooms Best Western 6,559 NH Hotels 39 6, 3 Mercure 7 3,39 Holiday Inn 5,39 5 Novotel 3, 6 Sheraton 5,33 7 Best Western Plus 9,9 Hilton 5,66 9 Crowne Plaza 7,76 Hilton Garden Inn,3 DOMESTIC Rank Luxury Hotels Rooms Gb Thermae Hotels 3 5 Delphina Iti Hotels- Colonna Luxury 3 77 Boscolo Select Jsh 5 7 Baglioni 6 39 Giorgio Mazzella Group Sina 5 39 Allegroitalia 5 39 INTERNATIONAL Rank Luxury Hotels Rooms Luxury Collection 95 Westin 99 3 Mgallery By Sofitel 5 65 NH Collection Autograph Marriott Melia' 9 7 Rocco Forte 3 7 Belmond 6 9 Dorchester Collection 399 Hilton 379 Please Note: ALL ITALY DATA AS OF FEBRUARY Horwath HTL l European Hotels & Chains Report 5

86

87 The Dutch hotel industry is flourishing, reaching record occupancies, room rates and revenues in 7 and projecting further growth for the future. Ewout Hoogendoorn, Managing Director, Horwath HTL Key Statistics 7 Chain hotels 663 Chain rooms 76,33 Average size per chain hotel in rooms.3 Country hotels stock (overall supply) 3,53 Country rooms Stock (overall supply) 9,79 Average size per hotel in rooms 3,696 Chain penetration % by hotels,9% Chain penetration % by keys 5,9% Total number of brands 7 Domestic brands 39 International brands 6 Second-tier operated hotels 6 International chain hotels (including double counting) 6 Domestic chain hotels (including double counting) 7 International chain rooms (including double counting), Domestic chain rooms (including double counting),3 Horwath HTL l European Hotels & Chains Report 7

88 : The market The Dutch hotel industry is flourishing, reaching record occupancies, room rates and revenues in 7 and projecting further growth for the future. Hotel supply has been increasing at a record pace, particularly in most of the major cities and especially in the capital city of Amsterdam. The increased supply and demand in Amsterdam has lead to a strong sense of over-tourism among the local population and politicians. As a result, a near total hotel stop has been implemented. However, it may be some years before the effects of the hotel stop are visible, as there are still dozens of locations where hotel developments are already approved. Meanwhile, the other main cities in the are experiencing increased attention from developers and investors, and are expected to maintain a strong growth rate in both supply and demand. The currently has a total of over 3,5 accommodations, offering almost 3, rooms. While only 9% of all accommodations is chain affiliated, almost 6% of all hotel rooms belong to a chain. Chain penetration is particularly high in the Upscale, Upper Upscale and Luxury hotels, but much less so in Midscale and Budget & Economy hotels. Chain penetration is highest in and around Amsterdam Schiphol Airport, and in cities such as Eindhoven, The Hague and Rotterdam. More rural tourist destinations such as Noordwijk and Valkenburg offer a large number of hotels, but very few are chain-affiliated. The largest hotel chain in number of rooms remains Van der Valk, with 7 hotels and almost, hotel rooms. The largest international chain is Accor Hotels, which offers 6 hotels and almost, hotel rooms in The. The fast-growing domestic hotel chain Fletcher Hotels has now surpassed Van der Valk in number of hotels, reaching 7. However, as most Fletcher Hotels are relatively small, with a total of 5, rooms it is only the fourth chain in number of hotel rooms. A total of 3 hotel brands are active, including 36 domestic brands and 67 international brands. Brands with the largest number of hotel rooms are Van der Valk, NH, Fletcher and Bastion. Hampshire Hospitality has dropped out of the Top as the company has split into two, resulting in the return of the Eden chain and brand. Horwath HTL l European Hotels & Chains Report

89 : Year on year data Key Statistics 6 7 % Diff. Chain hotels % Chain rooms 7,67 76,33 5.% Average size per chain hotel in rooms % Country hotels stock (overall supply) 3,3 3,53.% Country rooms stock (overall supply),565 9,79 3.9% Average size per hotel in rooms 3,67 3,696.9% Chain penetration % by hotels.6%.9%.6% Chain penetration % by keys 5.% 5.9%.% Total number of brands 99 7.% Domestic brands % International brands 6 6.5% Second-tier operated hotels 6.5% International chain hotels (including double counting) % Domestic chain hotels (including double counting) % International chain rooms (including double counting) 37,9, 7.7% Domestic chain rooms (including double counting),5,3 3.% : Key points Chain Hotels 3 new chain hotels were added in the, with a total of 3,666 rooms. The most active chain is Fletcher Hotels, which added hotels to its brand. The largest single addition was the opening of the 76 room Park Inn by Radisson in Amsterdam. Total number of brands The total number of hotel brands in the increased from 99 to 7. The new brands include one new domestic brand and seven new international brands. Domestic brands Newly active brands in the include Cityden Up, a spin-off of the domestic short stay brand Cityden. International brands The Irish Prem Group brought its serviced apartments brand to the with Premier Suites Plus in Rotterdam. IHG introduced the trendy, super-green QO Hotel in Amsterdam. International hostel brands Generator and Via opened their first hotels in The, as did Indigo and Pestana. After almost 5 years, the Days Inn brand was finally introduced in the, with the first hotel opening in Rotterdam. Country hotels stock In addition to the 3 new chain hotels, 69 unbranded hotels were added to the supply,including the Ammonite Hotel in Amsterdam, Hotel The James in Rotterdam and a new hotel at the nation s largest amusement park, Efteling. Horwath HTL l European Hotels & Chains Report 9

90 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size Hotels % Rooms % Avg. Size Budget & Economy 5 6.% 3,9 5.% 76 Midscale 7.9%, 3.7% 3 Upscale & Upper-Upscale % 6, 6.% 53 Luxury 9.% 96.3% TOTAL 663.% 76,33.% 5 CHAIN PENETRATION Hotels Rooms Budget & Economy.% 33.7% Midscale 5.% 3.% Upscale & Upper-Upscale 56.6% 7.3% Luxury.% 7.5% TOTAL.9% 5.% DOMESTIC Hotels % Rooms % Avg. Size Budget & Economy, 3.9%,56.9% Midscale,5 5.% 57,33.3% 3 Upscale & Upper-Upscale % 59,7 5.% Luxury.3%,35.% TOTAL 67. 3, 9 Horwath HTL l European Hotels & Chains Report

91 : Ranking by size Rank Chain Groups Hotels Rooms Van der Valk 7 9, AccorHotels 6 7,977 3 NH Hotels 36 6,7 Fletcher 7 5, 5 IHG 3,6 6 Louvre 5 3,55 7 Bastion Hotel Group 3 3,3 Marriott International 3,3 9 Hilton,69 Radisson Hotel Group,39 BRANDS Rank Chain Brands Hotels Rooms Van der Valk 7 9, NH 3 5,65 3 Fletcher 7 5, Bastion 3 3,9 5 Best Western, 6 Ibis, 7 Novotel 9,7 The Student Hotel 7,766 9 Bilderberg 7,696 Golden Tulip 9,6 Rank Domestic Chain Groups Hotels Rooms Van der Valk 7 9, Fletcher 7 5, 3 Bastion 3 3,3 Apollo,995 5 TVHG,93 6 Eden Hotels,79 7 The Student Hotel 7,766 WestCord Hotels 5,75 9 Bilderberg 7,696 Amrâth Hôtels,33 BRANDS Rank Domestic Chain Brands Hotels Rooms Van der Valk 7 9, Fletcher 6,937 3 Bastion 3 3,9 The Student Hotel 7,766 5 Bilderberg 7,696 6 Golden Tulip 9,6 7 WestCord,97 Eden,9 9 Apollo,35 Amrâth,6 Rank International Chain Groups Hotels Rooms AccorHotels 6 7,977 NH Hotels 36 6,7 3 IHG 3,6 Louvre 5 3,55 5 Marriott International 3,3 6 Hilton,69 7 Radisson Hotel Group,39 Best Western Hotels, 9 PPHE Hotels Group 6,7 Carlton Hotel Collection 7 6 BRANDS Rank International Chain Brands Hotels Rooms NH 3 5,65 Best Western, 3 Ibis, Novotel 9,7 5 Mercure,5 6 Holiday Inn Express,35 7 Hilton 5,66 Park Plaza 5, 9 NH Collection 9 Marriott 3 97 Horwath HTL l European Hotels & Chains Report 9

92 : Domestic & International brands vs. Europe % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms, 3, 3,6 3,5,53, 3, 36,77 373, 39,56 3,5,,7,, 6,96, , 76,33 7, Chain hotels Chain rooms : Total of brands per Europe total 3 9 % ,56 3, 3,9 3,7,567 5, % Total of brands per European total Total number of brands 9 Horwath HTL l European Hotels & Chains Report

93 : European Chain Penetration.% chain hotels 663 total chain hotels Horwath HTL l European Hotels & Chains Report 93

94 : Ranking by scale (all brands) Rank Economy & Midscale Hotels Rooms Fletcher 7 5, Bastion 3 3,9 3 Best Western, Ibis, 5 The Student Hotel 7,766 6 Mercure,5 7 Holiday Inn Express,35 XO 7, 9 Tulip Inn 955 Campanile 93 Rank Upscale & Upper Upscale Hotels Rooms Van der Valk 7 9, NH 3 5,65 3 Novotel 9,7 Bilderberg 7,696 5 Golden Tulip 9,6 6 WestCord,97 7 Eden,9 Apollo,35 9 Hilton 5,66 Amrâth,6 Rank Luxury Hotels Rooms W 3 Sofitel 3 Andaz Waldorf Astoria 93 5 Luxury Collection 9 6 InterContinental 79 7 Warwick : Ranking by location Rank Destination Hotels Amsterdam 7 Valkenburg 7 3 The Hague 7 Rotterdam 69 5 Maastricht 59 6 Zandvoort 35 7 Utrecht 3 Noordwijk 3 9 Groningen Eindhoven 7 Rank Destination Rooms Amsterdam 3,66 Rotterdam 5,77 3 The Hague,6 Hoofddorp,79 5 Maastricht,6 6 Eindhoven,7 7 Utrecht,95 Valkenburg,77 9 Schiphol,7 Noordwijk,9 9 Horwath HTL l European Hotels & Chains Report

95 : Ranking by scale (Domestic vs International brands) DOMESTIC Rank Economy & Midscale Hotels Rooms Fletcher 7 5, Bastion 3 3,9 3 The Student Hotel 7,766 XO 7, 5 Tulip Inn 9,55 6 Stayokay 7 Postillion 6 55 Teleport 9 Hotel V 3 CityHub 76 INTERNATIONAL Rank Economy & Midscale Hotels Rooms Best Western, Ibis, 3 Mercure,5 Holiday Inn Express,35 5 Campanile 93 6 Ibis budget Ramada 3 73 Park Inn by Radisson 66 9 easyhotel 6 6 Hampton by Hilton 3 57 DOMESTIC Rank Upscale & Upper Upscale Hotels Rooms Van der Valk 7 9, Bilderberg 7,696 3 Golden Tulip 9,6 WestCord,97 5 Eden,9 6 Apollo,35 7 Amrâth,6 Inntel 6 9 Hampshire 5 73 CitizenM INTERNATIONAL Rank Upscale & Upper Upscale Hotels Rooms NH 3 5,65 Novotel 9,7 3 Hilton 5,66 Park Plaza 5, 5 NH Collection 9 6 Marriott Carlton Hotel Collection 6 35 Holiday Inn 7 9 Crowne Plaza 76 Radisson Blu 3 65 DOMESTIC Rank Luxury Hotels Rooms INTERNATIONAL Rank Luxury Hotels Rooms W 3 Sofitel 3 Andaz Waldorf Astoria 93 5 Luxury Collection 9 6 InterContinental 79 7 Warwick Horwath HTL l European Hotels & Chains Report 95

96

97 With far less fanfare than other European neighbours, has quietly been building a serious number of first class hotels, many affiliated to international chains, specifically Accor. Dariusz Futoma, Managing Director, Horwath HTL Key Statistics 7 Chain hotels 3 Chain rooms 7, Average size per chain hotel in rooms 39 Country hotels stock (overall supply),36 Country rooms Stock (overall supply) 7, Average size per hotel in rooms 5 Chain penetration % by hotels % Chain penetration % by keys 37% Total number of brands 6 Domestic brands 6 International brands 35 Second-tier operated hotels International chain hotels (including double counting) 73 Domestic chain hotels (including double counting) International chain rooms (including double counting) 7,76 Domestic chain rooms (including double counting) 6,59 Horwath HTL l European Hotels & Chains Report 97

98 : The market has been one of the success stories of the last few years. With far less fanfare than other European neighbours, has quietly been building a serious number of first class hotels, many affiliated to international chains, specifically Accor. In the same way that Polish banks had far less exposure to risky loans during the financial crisis, the investment community has the same attitude to risk for its hotel projects as well. For a country that is not a massive tourist destination, they have almost as many chain affiliated hotels as and more than, and. That the majority of these hotels (%) are in the midscale sector, as opposed to the upper and upper upscale hotels which are most prevalent in almost all the other countries, only goes to reinforce the impression that knows where the market is and plays to its strength. The decision of one of its largest owners, Orbis, to bet on the Accor brands has proved to be a master stroke. The annual occupancy of 7.3 is good, but the average rate of just over 67 Euros shows that there is no huge appetite at the moment for more upscale projects. for example has a similar occupancy, but an ADR over Euros. This sits very much in the sweetspot of the midscale brands that Accor excels at and explains why they have been able to develop 7, more than the other next best performers combined. However we could be reaching a point of critical mass and the other brand, Hilton and Marriott in particular have recognised the potential and are pushing hard. One last point to consider is the city spread of chains hotels is very even. Warsaw is obviously the leader with 55 but not by much. Krakow has 5, Wroclaw has 6 and Gdansk has. This shows that there is solid demand across many destinations and should bode well for future development 9 Horwath HTL l European Hotels & Chains Report

99 : Year on year data Key Statistics 6 7 % Diff. Chain hotels % Chain rooms 3,97 7,.% Average size per chain hotel in rooms % Country hotels stock (overall supply),36,36.% Country rooms stock (overall supply) 7, 7,.% Average size per hotel in rooms 5 5.% Chain penetration % by hotels % %.% Chain penetration % by keys 37% 37%.% Total number of brands 6 6.% Domestic brands 6 6.% International brands % Second-tier operated hotels.% International chain hotels (including double counting) % Domestic chain hotels (including double counting).% International chain rooms (including double counting) 7,76 7,76.% Domestic chain rooms (including double counting) 6,59 6,59.% : Key points Accor is king for now Accor make up the lions share of the Chains market with 7 hotels and almost,5 rooms. That s more than the next 6 runners up combined. Not surprisingly, Ibis, Mercure and Novotel are the top three brands in the country. All eyes are on Marriott and Hilton though who have big plans to muscle in. Midscale is massive Unlike many of their European counterparts, Midscale rather than upper upscale brands are the most significant in, representing nicely where the market sits. Most room for growth is in the budget (3.7%) and Luxury markets (.5%). A good spread One other thing that has done well is to spread the chains out over several locations and to not focus too much on the capital Warsaw. Warsaw still comes top in terms of number of properties at 55, but Krakow is close behind on 5, Wroclaw has 6 and Gdansk has. Horwath HTL l European Hotels & Chains Report 99

100 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size Hotels % Rooms Avg. Size Budget & Economy 7 3.7% 5,96 Midscale 3.%,37 Upscale & Upper-Upscale 35.%,3 6 Luxury 36.5% 7,7 96 TOTAL 3.% 7, 39 : Ranking by location Rank Destination Hotels Rooms Warszawa 55,6 Kraków 5 5,79 3 Wrocław 6 3,5 Gdańsk,69 5 Poznań 6,33 6 Łódź 5,57 7 Katowice, Swinoujście -,9 9 Karpacz,6 Sopot 9 7 Horwath HTL l European Hotels & Chains Report

101 : Ranking by size Rank Chain Groups Hotels Rooms Accor/Orbis 7,9 Hilton Hotels 9 3,33 3 Marriott International 3 3,9 Gołebiewski 33 5 Radisson,33 6 Louvre Hotels Group,5 7 IHG,7 Best Western 9,699 9 Qubus,65 Gromada 9 93 BRANDS Rank Chain Brands Hotels Rooms Ibis 33,5 Mercure 3, 3 Novotel 9,775 Gołębiewski,33 5 Radisson Blu 6,3 6 Qubus,65 7 Hampton By Hilton 9,375 Best Western, 9 Wam 5,3 Campanille,6 Rank Domestic Chain Groups Hotels Rooms Gołebiewski,33 Qubus,65 3 Satoria Group, Arche 9, 5 WAM 5,3 6 Zdrojowa Invest 9,6 7 Gromada 9 93 Diament Focus 9 Trip BRANDS Rank Domestic Chain Brands Hotels Rooms Gołębiewski,33 Qubus,65 3 Wam 5,3 Satoria Group 7,6 5 Gomada Arche Q Hotels Zdrojowa Invest Diament Focus 6 57 Rank International Chain Groups Hotels Rooms Accor/Orbis 7,9 Hilton Hotels 9 3,33 3 Marriott International 3 3,9 Radisson,33 5 Louvre Hotels Group,5 6 IHG,7 7 Best Western 9,699 Vienna House 5,5 9 Puro Hotels 5 5 B&B 5 6 BRANDS Rank International Chain Brands Hotels Rooms Ibis 33,5 Novotel 9,775 3 Mercure,76 Mercure 3,736 5 Radisson Blu 6,3 6 Hampton By Hilton 9,375 7 Best Western, Campanille,6 9 Sheraton 95 Holiday Inn 5 3 Horwath HTL l European Hotels & Chains Report

102 : Domestic & International brands vs. Europe % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms, 3, 3,6 3,5,53, 3, 36,77 373, 39,56 3,5,,7,, 6,96, , 76,33 7, Chain hotels Chain rooms : Total of brands per Europe total ,56 3, 3,9 3,7,567 5,99 % 7 6 % Total of brands per European total Total number of brands Horwath HTL l European Hotels & Chains Report

103 : European Chain Penetration.% chain hotels 3 total chain hotels Horwath HTL l European Hotels & Chains Report 3

104 : Ranking by scale (all brands) Rank Economy & Midscale Hotels Rooms Ibis 33,5 Mercure 3,736 3 Hampton By Hilton 9,375 Best Western, 5 Wam 5,3 6 Campanille,6 7 Gomada 9 93 B&B Novotel 6 Elbest 5 5 Rank Upscale & Upper Upscale Hotels Rooms Novotel 9,775 Gołębiewski,33 3 Mercure,76 Qubus,65 5 Holiday Inn Golden Tulip Radisson Blu Diament Best Western Double Tree By Hilton 3 Rank Luxury Hotels Rooms Radisson Blu 6,3 Sheraton 95 3 Zdrojowa Invest 677 Sofitel Double Tree By Hilton 59 6 Marriott 53 7 Hilton 6 Intercontinental 9 Westin 36 Likus 3 Horwath HTL l European Hotels & Chains Report

105 : Ranking by scale (Domestic vs International brands) DOMESTIC Rank Economy & Midscale Hotels Rooms Gomada 9 93 Wam Elbest 5 5 Focus Satoria Group Arche Hotel Qubus Hotel Centrum Syrena 35 INTERNATIONAL Rank Economy & Midscale Hotels Rooms Ibis 33,5 Mercure 3,736 3 Best Western, Campanille,6 5 Hampton By Hilton 9,375 6 B&B Novotel 6 Premiere Class 6 9 Puro 3 Vienna House Easy DOMESTIC Rank Upscale & Upper Upscale Hotels Rooms Gołębiewski,33 Qubus,65 3 Q Hotels Diament Interferie 39 6 Boutique Hotels Zdrojowa Invest 37 Malinowe Hotele Focus 3 3 Trip 7 INTERNATIONAL Rank Upscale & Upper Upscale Hotels Rooms Novotel 9,775 Mercure,76 3 Holiday Inn 5 3 Golden Tulip Radisson Blu 6 Courtyard By Marriott Best Western Puro Double Tree By Hilton 3 Hilton Garden Inn 3 DOMESTIC Rank Luxury Hotels Rooms Zdrojowa Invest 677 Likus INTERNATIONAL Rank Luxury Hotels Rooms Sheraton 95 Radisson Blu 6,3 3 Sofitel Marriott 53 5 Hilton 6 6 Intercontinental 7 Westin 36 Holiday Inn 37 9 Bristol 6 Double Tree By Hilton 59 Horwath HTL l European Hotels & Chains Report 5

106

107 still has strong appeal for investment and development, although finding good sites and under-exploited built assets, is becoming increasingly difficult. Philip Bacon, Director, Horwath HTL Key Statistics 7 Chain hotels,53 Chain rooms 36,77 Average size per chain hotel in rooms 5 Country hotels stock (overall supply) 7,369 Country rooms Stock (overall supply) 69,539 Average size per hotel in rooms 9 Chain penetration % by hotels 33.3% Chain penetration % by keys 55.9% Total number of brands 9 Domestic brands International brands 6 Second-tier operated hotels 7 International chain hotels (including double counting) 7 Domestic chain hotels (including double counting),36 International chain rooms (including double counting) 6,59 Domestic chain rooms (including double counting) 3,6 Horwath HTL l European Hotels & Chains Report 7

108 : The market still has strong appeal for investment and development, although finding good sites and underexploited, built assets is becoming increasingly difficult. Investors are busy studying competing, specialist asset classes such as senior residences and student residences, which in some cases offer higher yields. This has a knock-on effect on the hospitality sector, especially tourist apartments, which are destined to become an increasingly important feature of the hospitality sector as operators realize that they need to specialize in this asset class in order to compete with the combination of online platforms and local, entrepreneurial property managers. From a tourism point of view, has a number of quite distinct regions and cities, and these are experiencing different levels of activity and are therefore attracting different types of investor. The residential market has seen significant growth in recent years, often driven by the Golden Visa program that has fuelled interest in resort-based property. Limited supply is putting pressure on the need for new concept development that will be sustainable for the next cycle and the next generation of tourists. Many existing hotels are stuck in the past and radical change is needed. As they say, there are only two types of hotel; those that need to change, and those that need to be torn down. Horwath HTL l European Hotels & Chains Report

109 : Year on year data Key Statistics 6 7 % Diff. Chain hotels,35,53.3% Chain rooms 379,935 36,77.% Average size per chain hotel in rooms % Country hotels stock (overall supply) 7,53 7,369.% Country rooms stock (overall supply) 667,59 69, % Average size per hotel in rooms % Chain penetration % by hotels 33% 33%.% Chain penetration % by keys 57% 56% -.5% Total number of brands 9.3% Domestic brands 69.7% International brands 7 6.3% Second-tier operated hotels % International chain hotels (including double counting) % Domestic chain hotels (including double counting),9,36 7.5% International chain rooms (including double counting) 73,65 6,59 -.% Domestic chain rooms (including double counting) 36,77 3,6 5.% : Key points % growth in total chain hotels in a mature market highlights continuing interest in the region on the part of both investors and operators. Lower growth in number of keys (.%) and a slight reduction in average room count of chain hotels (down.% to 5), suggest that restrictions in supply of properties are resulting in compromises on room count. Overall penetration by chain hotels remains constant at approximately 33% of total chain supply; the highest of the countries measured in our survey. In terms of room count, Meliá Hotels and Resorts dominance grows and now occupies first and second place in the brand ranking (Meliá and Sol), pushing Tryp by Wyndham (managed by Meliá) out of the top ten, to be replaced by Catalonia. B&B hotels rises from th to 7th place in the ranking of international brands, with the top ten international brands still dominated by Accor (73 hotels in total compared to largest single brand, AC by Marriott, with 59 hotels). The total number of brands has grown by % to 9. With (NB update summary chart which shows 65) domestic brands, has the highest number of all the countries in our survey; a reflection of both the variety of hotel types and the deeply regional character of s hospitality market. The number of international brands also grew by % to 6; a reflection of the continuing interest from international operators. Horwath HTL l European Hotels & Chains Report 9

110 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size Hotels % Rooms Avg. Size Budget & Economy %,7 7 Midscale 69 5.%,333 3 Upscale & Upper-Upscale,33 5.% 5, 75 Luxury 9.%,6 7 TOTAL,53.% 36,77 5 DOMESTIC Hotels % Rooms Avg. Size Budget & Economy,6.9% 75,3 35 Midscale 6 3.5% 6,6 3 Upscale & Upper-Upscale,5 35.% 36,6 3 Luxury 7 5.7% 6,7 7 TOTAL 7,369 69,539 9 : Ranking by location : Primary Demand Driver Rank Destination Hotels Rooms Barcelona ,3 Madrid,6 3 Palma - Calviá 363, Costa del Sol 96 36, 5 Gran Canaria 37, 6 Costa Blanca 39 3,95 7 St. Cruz de Tenerife 3 3,7 Costa Brava 9,76 9 Costa Daurada 67,7 Sevilla 9,99 DRIVER International Domestic Hotels Rooms Hotels Rooms Urban, ,5 Suburban 5 5, 37 35,9 Rural ,5 Beach, , Golf,935 6,5 Ski & Mountain - - 3,3 Airport 7, Motel Theme Park, Horwath HTL l European Hotels & Chains Report

111 : Ranking by size Rank Chain Groups Hotels Rooms Meliá Hotels International 9 5,79 NH Hotel Group 33 6,67 3 Barceló Hotel Group 66 5,95 Marriott International 95,9 5 Eurostars Hotel Company 7,39 6 Accor Hotels 96,3 7 Riu Hotels & Resorts 3, H Hotels 5,77 9 Best Hotels 3 9,3 Iberostar Hotels & Resorts,7 BRANDS Rank Chain Brands Hotels Rooms Meliá 39,399 Sol 3,6 3 H Hotels 5,6 NH 9, 5 Barceló 35, 6 Best 6,559 7 Eurostars 67 7,3 AC Hotels By Marriott 59 6,55 9 Catalonia 56 6,5 Globales 6 6,96 Rank Domestic Chain Groups Hotels Rooms Meliá Hotels International 9 5,79 NH Hotel Group 33 6,67 3 Barceló Hotel Group 66 5,95 Eurostars Hotel Company 7,39 5 Riu Hotels & Resorts 3, 6 H Hotels 5,77 7 Best Hotels 3 9,3 Iberostar Hotels & Resorts,7 9 Senator Hotels & Resorts 33 6,3 Hoteles Catalonia 56 6,5 BRANDS Rank Domestic Chain Brands Hotels Rooms Meliá 39,399 Sol 3,6 3 H Hotels 5,6 NH 9, 5 Barceló 35, 6 Best 6,559 7 Eurostars 67 7,3 Catalonia 56 6,5 9 Globales 6 6,96 Occidental 5,55 Rank International Chain Groups Hotels Rooms Marriott International 95,9 Accor Hotels 96,3 3 Wyndham Hotels Worldwide 5 6, Princess Hotels & Resorts 6 5, 5 Allsun Hotels 3, 6 IHG 7 3, 7 Thomas Cook 6 3, B&B Hotels,73 9 Hilton 3,5 Tui Hotels & Resorts,963 BRANDS Rank International Chain Brands Hotels Rooms AC Hotels By Marriott 59 6,55 Tryp By Wyndham 6,65 3 Princess 5,3 Ibis,66 5 Allsun 3, 6 Labranda,9 7 B&B Hotel,73 Ibis Budget 5, 9 Novotel,6 Holiday Inn Express,9 Horwath HTL l European Hotels & Chains Report

112 : Domestic & International brands vs. Europe % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms, 3, 3,6 3,5,53, 3, 36,77 373, 39,56 3,5,,7,, 6,96, , 76,33 7, Chain hotels Chain rooms : Total of brands per Europe total ,56 3, 3,9 3,7,567 5,99 % 7 6 % Total of brands per European total Total number of brands Horwath HTL l European Hotels & Chains Report

113 : European Chain Penetration 5.9% chain hotels,53 total chain hotels : Business Model HOTELS Franchising % Lease % Management contract % Owned % Total % Economy 37 5% 95 37% 7% 5 % 55 % Midscale 5 7% 5 3% 7 9% 37 53% % Upscale & Upper-Upscale 69 % 5 6% 6 3%, 5%,766 % Luxury % 6% 73 % 67 56% 3 % Total 76 6% 5 7% 39 %,79 55% 3,39 % ROOMS Franchising % Lease % Management contract % Owned % Total % Economy,75 6% 6, 37%,3 7% 6,7 39% 6,63 % Midscale 5,76 6% 6,9 6% 7,67 7% 6,65 6%,6 % Upscale & Upper-Upscale, % 66,777 % 35,765 %, 6% 9,753 % Luxury,95 %,6 7%,36 3% 9,76 57% 5,6 % Total,37 5% 7,6 3% 56, % 3,37 6% 69,76 % Horwath HTL l European Hotels & Chains Report 3

114 : Ranking by scale (all brands) Rank Economy & Midscale Hotels Rooms Sol 3,6 Best 6,559 3 Catalonia 56 6,5 Globales 6 6,96 5 Tryp By Wyndham 6,65 6 Ibis,66 7 Oh!Tels 7 3,75 H Top 3,6 9 B&B Hotel,73 Ibis Budget 5, Rank Upscale & Upper Upscale Hotels Rooms Meliá 39,399 H Hotels 5,6 3 NH 9, Barceló 35, 5 Eurostars 67 7,3 6 Ac Hotels By Marriott 59 6,55 7 Occidental 5,55 Princess 5,3 9 Hipotels 7,7 Servigroup,665 Rank Luxury Hotels Rooms NH Collection 9, Riu Palace 7,3 3 Gran Meliá 7,673 Royal Hideaway 6,3 5 Sheraton 5, 6 Me By Meliá 5, 7 Hilton,93 W,6 9 Hard Rock Hotel 9 The Ritz-Carlton 93 : Destination pipeline (-9) PIPELINE Rank Destination Hotels Rooms Mallorca 3,6 Costa del Sol,63 3 Madrid,6 Islas de Gran Canaria 76 5 Barcelona Costa Dorada Costa Blanca 5 65 Ibiza Costa Tropical 35 Bilbao Horwath HTL l European Hotels & Chains Report

115 : Ranking by scale (Domestic vs International brands) DOMESTIC Rank Economy & Midscale Hotels Rooms Sol 3,6 Best 6,559 3 Catalonia 56 6,5 Globales 6 6,96 5 Oh!Tels 7 3,75 6 H Top 3,6 7 Exe 36 3,395 Alegría Hotels 5,55 9 Blue Sea,9 Azuline 9,76 INTERNATIONAL Rank Economy & Midscale Hotels Rooms Tryp By Wyndham 6,65 Ibis,66 3 B&B Hotel,73 Ibis Budget 5, 5 Novotel,6 6 Holiday Inn Express,9 7 Smartline 5,9 Holiday Inn 6,6 9 Campanile 7 5 Ibis Styles 9 7 DOMESTIC Rank Upscale & Upper Upscale Hotels Rooms Meliá 39,399 H Hotels 5,6 3 NH 9, Barceló 35, 5 Eurostars 67 7,3 6 Occidental 5,55 7 Hipotels 7,7 Servigroup,665 9 Clubhotel Riu, Playa 3,9 INTERNATIONAL Rank Upscale & Upper Upscale Hotels Rooms Ac Hotels By Marriott 59 6,55 Princess 5,3 3 Allsun 3, Labranda,9 5 Universal 3,66 6 Pierre & Vacances,9 7 Sentido 6,3 Mercure 9 9 Doubletree By Hilton 6 7 Travelodge 5 6 DOMESTIC Rank Luxury Hotels Rooms NH Collection 9, Riu Palace 7,3 3 Gran Meliá 7,673 Royal Hideaway 6,3 5 Me By Meliá 5, 6 Iberostar Premium Gold 9 7 Grand Palladium Vincci Selección Iberostar Grand Collection 79 Hospes 9 7 INTERNATIONAL Rank Luxury Hotels Rooms Sheraton 5, Hilton,93 3 W,6 Hard Rock Hotel 9 5 The Ritz-Carlton 93 6 Westin Autograph Collection The Luxury Collection 9 9 Radisson Blu 3 76 Fairmont 3 Horwath HTL l European Hotels & Chains Report 5

116

117 The hotel asset class has increasingly become a focal point for institutional investors. We consider this to be an important driver for the continued development of the Swiss hotel industry. Heinz Wehrle, Managing Director, Horwath HTL Key Statistics 7 Chain hotels 7 Chain rooms 3,9 Average size per chain hotel in rooms Country hotels stock (overall supply), Country rooms Stock (overall supply) 3,75 Average size per hotel in rooms 3 Chain penetration % by hotels 9% Chain penetration % by keys 59% Total number of brands 65 Domestic brands International brands 57 Second-tier operated hotels % International chain hotels (including double counting) 5 Domestic chain hotels (including double counting) International chain rooms (including double counting),79 Domestic chain rooms (including double counting) 9,39 Horwath HTL l European Hotels & Chains Report 7

118 : The market In total, Swiss hotels welcomed 6.% more guests in 7 than they did the year before. Nearly k - equalling 37% of these additional arrivals - were of domestic origin, thus, generating a.% in that category. Developments in 7 were positive for the hotel industry in more than one way. In addition to the improved regulatory framework, demand and profitability has increased. As a result, the hotel asset class has increasingly become a focal point for institutional investors. We consider this to be an important driver for the continued development of the Swiss hotel industry. Destinations have created new products which generate attention in and abroad. Results of our research shows that Swiss hoteliers do not leave the development of hotel chains and brands to foreign companies. New stars are rising who offer trendy, highly demanded products. As of now, % of all chain hotels in are affiliated to Swiss groups with an upward tendency. The three Asian target market with the biggest growth rates were India, Korea and China, with a combined increase of 6.6% in arriving travellers. New openings, acquisitions or franchise agreements accounted for 3% of the additional chain affiliated room supply in 7, while 6% are related to domestic chains exceeding the threshold for consideration for the first time or smaller regional groups that have gone unnoticed in the first edition of the report. Horwath HTL l European Hotels & Chains Report

119 : Year on year data Key Statistics 6 7 % Diff. Chain hotels 7 5% Chain rooms 5, 3,9 % Average size per chain hotel in rooms 7-5% Country hotels stock (overall supply),56, -% Country rooms stock (overall supply) 7,939 3,75 3% Average size per hotel in rooms 9 3 3% Chain penetration % by hotels % 9% % Chain penetration % by keys 5% 59% % Total number of brands 5 65 % Domestic brands % International brands 5 57 % Second-tier operated hotels - % International chain hotels % Domestic chain hotels 3 % International chain rooms 7,9,79 % Domestic chain rooms 7,55 9,39 9. : Key points Geneva is the king of the Brands No other region in has a higher chain penetration rate than Geneva. At 33.% it topped last year s result of.% although the city accounts for only % of the country s chain affiliated room supply. Zurich under pressure It will be interesting to see how Zürich will cope with yet another nearly 6 rooms entering the market within the next two years. Owners are Swiss 7% of all owner operated hotels are affiliated to a domestic chain. In fact, 7% of all domestic chain hotels are owner operated and another % are leased. Management and Franchise contracts play only a minor role in the domestic landscape. Vive la! Accor and Club Med hold % of all hotels with international chain affiliation, owed to Accor s aggressive expansion strategy. Horwath HTL l European Hotels & Chains Report 9

120 : Total number of brands & YOY growth % 7 7 % % Total of brands per European total Total brands % year on year growth : Ranking per scale & size Hotels % Rooms Avg. Size Budget & Economy % 3,73 Midscale % 7,63 7 Upscale & Upper-Upscale 5 3.7% 3,99 33 Luxury 33.%,76 TOTAL 7.% 3, OVERALL SUPPLY Hotels % Rooms Avg. Size Budget & Economy 9 5.% 7,93 7 Midscale, 56.5% 37,56 35 Upscale & Upper-Upscale 5 3.7% 33,36 7 Luxury 9.7% 9,679 TOTAL,9.%,59 6 : Ranking by location : Primary Demand Driver Rank Destination Hotels Rooms Zürich Region 63,63 Geneva 5,63 3 Grisons 7,96 Berne Region 9,55 5 Lake Geneva Area (Vaud),39 6 Basle Region 6,5 7 Lucerne / Vierwaldstättersee,36 Valais, 9 Aargau Region 7 6 Ticino 3 DRIVER International Domestic Hotels Rooms Hotels Rooms City 5 6,73 5,95 Conference 7, 9,3 Spa 7, Mountain Resort,33 5,6 Resort (other),7 6 7 Horwath HTL l European Hotels & Chains Report

121 : Ranking by scale (all brands) BRANDS Rank Economy & Midscale Hotels Rooms Ibis,37 Sorell Hotels Ibis Styles 6 57 Motel One 53 5 Best Western Holiday Inn Express hours 96 Park Inn 9 9 Tulip Inn Adagio 79 BRANDS Rank Upscale & Upper Upscale Hotels Rooms Novotel 7,99 Sunstar Hotels Mövenpick Hotels 956 Radisson BLU 5 Crowne Plaza 73 6 Swissotel 55 7 Club Med 575 NH Hotels 5 9 Holiday Inn 3 39 Renaissance 37 BRANDS Rank Luxury Hotels Rooms Kempinski 596 VJC Intercontinental 59 Bürgenstock Selection Mövenpick 35 6 Giardino Fairmont 36 Mandarin Oriental 9 9 Steigenberger 6 W 3 : Destination pipeline (-9) PIPELINE Rank Destination Hotels Rooms Zürich Region,59 Lucerne / Vierwaldstättersee Berne Region 3 Basle Region 6 5 Geneva 7 6 Aargau Region 7 7 Lake Geneva Area (Vaud) 7 Fribourg Region 5 Horwath HTL l European Hotels & Chains Report

122 : Domestic & International brands vs. Europe % % Domestic brands vs. Europe % International brands vs. Europe Total Domestic brands Total International brands : Chain hotels & rooms, 3, 3,6 3,5,53, 3, 36,77 373, 39,56 3,5,,7,, 6,96, , 76,33 7, Chain hotels Chain rooms : Total of brands per Europe total ,56 3, 3,9 3,7,567 5,99 % 7 6 % Total of brands per European total Total number of brands Horwath HTL l European Hotels & Chains Report

123 : European Chain Penetration.% chain hotels 7 total chain hotels : Business Model ROOMS Franchising % Lease % Management contract % Owned % Total % Economy 336 6% 6 3% 65 3%,5 5%,3 % Midscale,55 %,753 3%,7 7% 3,7 % 7,653 % Upscale & Upper-Upscale 3,6 6% 3,63 %,3 3% 5,93 3% 3, % Luxury 95 3% 57 6%,9 33%, 37% 3,96 % Total 6,36 3% 5,35 9% 5,3 %,67 7,7 % Horwath HTL l European Hotels & Chains Report 3

124

125 United Kingdom 7 was another cracking year for the hotel industry, with solid RevPAR growth across both London and the provinces. Because of this, and in seeming disregard of the ever-increasing uncertainty over the impact of Brexit, a significant volume of new supply entered the market, led by the brands both domestic and international. Patrick Angwin, Director, Horwath HTL United Kingdom Key Statistics 7 Chain Hotels 3,5 Chain Rooms 373, Average Size of Hotel (rooms) 6 Hotel Stock, Room Stock 76,755 Average Size of Hotel (rooms). Chain penetration by Hotels % Chain penetration by Rooms 9% Total Number of Brands Domestic Brands 6 International Brands Top Chains Total Hotels,53 Top Chains Total Rooms 7,9 Top Chains Hotels % 7% Top Chains Rooms % 75% Horwath HTL l European Hotels & Chains Report 5

126 United Kingdom: The market hotels enjoyed another bumper year in 7. Overall inbound tourism from overseas grew by % with a record total of 39.m visits. With each visit lasting on average just over 7 nights, this equated to 5 million overnight stays, of which typically slightly under half were spent in hotels. It is no surprise therefore that hotel performance saw reasonably strong growth: In London, RevPAR reached, up.6% on the previous year (occupancy +.% and ADR +.3%) In the provinces, RevPAR was up to 5, up 3.6% on 6 (occupancy +.5%, ADR +3.%). and were the top two European source markets, accounting for % and 9% respectively of total visits, and 6% each of total spend. The USA remains the most important long-haul inbound market, producing % of visits and 5% of total inbound visitor spend. It is noteworthy, however, that China re-entered the top list of inbound markets by visitor spend, generating 3%. At the same time, domestic tourism was also up on the previous year with.7 million trips generating million room nights, roundly a quarter of which were spent in hotel accommodation. Much of this buoyancy was underpinned by the Brexit vote, with the devaluation of the pound prompting both increased visitation from abroad and an increase in domestic leisure stays (so-called staycations ). Clouds are gathering on the horizon, however: continuing uncertainty over what Brexit actually means (and indeed over whether it will even go ahead) is starting to have a clear adverse impact on the economy and it is only a matter of time before this starts to impact the hotel industry. 6 Horwath HTL l European Hotels & Chains Report