Exploring City Pathways The European Landscape of Hospitality Jeremy Kelly Director Global Research, JLL 20 November 2018
Cities take centre stage Rapid Urbanisation Technology & Talent Changing Urban Footprints Cities Gaining Influence 2
A new language of city competitiveness is emerging technology diversity entrepreneurship biodiversity resilience governance culture infrastructure liveability talent health future-proofing innovation transparency brand inclusiveness agility Source: JLL 3
while A new language the hospitality of city sector competitiveness tackles structural is emerging shifts technology Shifting Demand diversity entrepreneurship environment resilience Growing and diversifying demand Diversification of governance offer culture infrastructure liveability talent health Disruptive Forces Home-sharing future-proofing innovation transparency brand Citizen dissatisfaction rises business friendliness agility Source: JLL 4
Disruption The impact of Home Sharing? Tel Aviv St Petersburg Venice Lisbon Edinburgh Moscow Paris Athens Budapest London Istanbul Europe s largest Airbnb markets as a proportion of hotel rooms 0% 50% 100% 150% Airbnb Listings (as a % of Hotel Rooms) Cities Taking Action Limits on number of nights Mandatory registration Geographic restrictions Streamlined tax procedures Source: JLL, STR, AirDNA; based on city only 5
Disruption Backlash against over-tourism Dublin Edinburgh Budapest London Paris Lisbon Athens Istanbul Tel Aviv St Petersburg Moscow Source: JLL, Oxford Economics, Mastercard International Visitors per Resident 0% 100% 200% 300% 400% 500% 600% Annual International Visitors as a % of Metropolitan Population Tourism is currently at the heart of the urban agenda Resistance in leading tourist cities notably and How do governments rebuild the connection between citizens and the tourism industry? 6
Exploring the DNA of Cities JLL s New Typology of Cities Brisbane Vancouver Melbourne Hamburg Oslo Helsinki Boston Seattle Austin Brussels Kyoto Los Angeles Sydney Toronto Dubai Cape Town Santiago Budapest Warsaw London Paris New York Tokyo Osaka Dallas Houston Dallas Athens Bangalore Shenzhen Taipei Kuala Lumpur Ho Chi Minh City Shanghai Beijing Chicago Moscow Istanbul Jakarta Manila Sao Paulo Mexico City Chengdu Chennai Tianjin Nanjing Hangzhou Source: JLL and The Business of Cities, January 2018 7
Exploring the DNA of Cities JLL s New Typology of Cities Tel Aviv Dublin Oslo Helsinki Hamburg Krakow Bucharest Budapest Warsaw London Paris Brussels Geneva Zurich Athens Moscow Istanbul Source: JLL and The Business of Cities, January 2018 8
European Landscape of Hospitality Hotel Market Scale Real Estate Investment Supply Pipeline Performance 9
City Scale and Attraction (Rank) Scale Commercial Scale v. Hotel Rooms Hotel Rooms 5000 15000 25000 35000 45000 55000 65000 1 Moscow Istanbul 21 London Paris London Paris 41 61 81 Dublin Warsaw Hamburg Brussels Lisbon Budapest Moscow Istanbul Athens 101 121 141 10
Investment Hotel Real Estate Investment London Paris Hamburg Dublin Edinburgh Billions 0 2 4 6 2015 2016 2017 H1 2018 London and Paris lead the way Source: JLL 11
Hotels Real Estate Investment (2015-2017, US$ mn) Investment stands out 2000 1800 1600 1400 Hamburg 1200 Dublin 1000 800 600 400 200 0 Edinburgh Manchester Brussels Moscow Geneva Cologne Athens Lisbon Helsinki Birmingham, UK Warsaw Budapest Dusseldorf Glasgow Gothenburg Zurich Oslo Lyon 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 Source: JLL Total Real Estate Investment (2015-2017, US$ mn) 12
Supply Supply Pipeline (as % of Existing Rooms) UK, Ireland, Germany European Gateways Edinburgh Manchester Dublin Cologne Zurich Hamburg London Warsaw Dusseldorf Budapest Birmingham Oslo Moscow Istanbul Helsinki Lisbon Paris Athens Geneva Brussels 0% 10% 20% 30% 40% 50% 60% Pipeline highlights UK and German cities Under Construction Final Planning Planning Source: JLL, STR 13
Rooms Under Construction (% of Existing Rooms) Performance Occupancy Rates v Construction 20% Edinburgh Manchester 15% Cologne Dublin 10% 5% Helsinki Brussels Moscow Geneva Zurich Dusseldorf Paris Athens Hamburg Warsaw Budapest Birmingham, UK Lisbon London 0% 68 70 72 74 76 78 80 82 84 Hotel Room Occupancy (%, 2017) 14
A New City Typology for Hospitality Global Hubs Hospitality Gateways London Paris Moscow Istanbul Tourism is an increasingly urban issue, and how cities manage and respond to it will shape their future pathways New World Cities Helsinki Oslo Dublin Edinburgh Manchester Cologne Dusseldorf Hamburg Zurich Lisbon Tel Aviv Brussels Geneva Budapest Bucharest Krakow Warsaw Hybrids 15
Greater Opposition Europe s 10 Hospitality Gateways 1 2 3 4 5 6 7 8 9 10 Gateways responding differently to pressures of tourism.. Restrictive Constrained Guarded Receptive Greater Capacity 16
17 Record-breaking investment in context of backlash 1 2 3 4 5 6 7 8 9 10 s hotel sector is booming but there are questions over its future Nee, tenzij ( No, unless) policy places restrictions on hotel development Tightening regulations on Airbnb listings Crackdowns on anti-social behaviour by tourists Everybody comes to the city and goes to the Van Gogh Museum in the morning, and [takes] a canal boat in the afternoon.
People in millions Reaching capacity? 1 2 3 4 5 6 7 8 9 10 6 4 2 0 Metropolitan Population 5.8 million international visitors in 2017 International Visitors Growing interest in s urban future as the city seeks to curb sprawl and densify 18
Poised for further growth? 1 3 4 5 6 7 8 9 10 2 Europe s third largest hotel market but ADR remains below German peers Will the opening of - Brandenburg Airport boost? Does including its government and citizens have an appetite for growth? 19
Rooms In Pipeline (% of Existing Rooms) New World Cities & Hybrids: Responding to the Growth Opportunities Brussels Budapest Cologne Dublin Dusseldorf Edinburgh Geneva Hamburg Helsinki Krakow Lisbon Manchester Oslo Warsaw Zurich 60% 50% 40% 30% 20% 10% Helsinki Geneva Brussels Dusseldorf Birmingham Zurich Krakow Lisbon Athens Warsaw Hamburg Budapest Dublin Edinburgh Manchester 0% 68 70 72 74 76 78 80 82 84 Hotel Room Occupancy (%) 20
Dublin Seven Years of Continuous RevPAR Growth Brussels Cologne Dublin Dusseldorf Edinburgh Geneva Hamburg Helsinki Lisbon Manchester Oslo Tel Aviv Zurich Dublin continues to be investor hotspot Investor interest and growing demand buoying significant supply pipeline Growing tech credentials Magnet for HQs and MNCs Potential Brexit relocations Suppressed demand? 1,000 room shortage by 2020 Impact on affordability 21
A New Approach to Tourism Brussels Cologne Dublin Dusseldorf Edinburgh Geneva Hamburg Helsinki Lisbon Manchester Oslo Tel Aviv Zurich The end of tourism as we know it Locals are the destination Quality Of life Gastronomy Localhood for everyone Lifestyle City Design The experience of temporary localhood Conferences & conventions 22
City Pathways: Responding to Urban Tourism Are the lines blurring between resident quality of life and the visitor experience? How can cities balance twin pressures of citizen satisfaction and continued tourist demand? How can the real estate and hotels sector respond? 23
Jeremy Kelly jeremy.kelly@eu.jll.com +44 (0)20 3147 1199