15 Sep, 2017
Amsterdam: One Of The Best Place To Grow
Amsterdam had another good year in 2016. Supply is still increasing, but the enforcement of official curbs on hotel development should help limit growth and help lift existing hotel performance further. The growth trend is projected to continue into 2017 and 2018 with ADR prices driving Rev PAR growth while occupancy remains relatively flat.
Amsterdam is the capital of the Netherlands and also its financial and cultural hotspot. The city attracts businesses and tourists due to the favorable business climate and numerous attractions.
In 2016 the city had a record number of guests (estimated 7.2 million increase of 5.8%) and a large number of multinationals have their headquarters here, such as Heineken, ING, Philips, Booking.com, ABN AMRO, Tommy Hilfiger, Shutterstock and WeWork.
The city is renowned for its ability to retain capital, people and ideas as well as maintaining that performance in the long term. Due to the favorable business climate the city sees more and more companies moving to Amsterdam
The Amsterdam hotel market has shown robust performance since 2009. However, 2016 marked a turning point where occupancy growth stabilized and pushed a solid ADR performance, and a 3.1% in Rev PAR. For 2017, we expect the performance to be less spectacular than 2015 and 2016, but the growth will continue.
Municipal policy has led to significant increase in supply over the last few years. 2016 has seen an increase of 2,000 rooms to the total of 32,000 rooms in the city. For 2017/2018 we estimate that the number of hotels will increase by approximately 22 and the room supply will grow by approximately 5,900 rooms.
The introduction of the new «hotel stop» policy to be enforced by the municipality of Amsterdam, will mean it will be very difficult to develop new hotels in Amsterdam center. The «hotel stop» policy could have a long term effect on the lodging market in Amsterdam in the sense that prices may rise and this might stimulate the supply of alternative accommodation.
The city has come to an agreement with AirBnB, in an effort to create a level playing field. In this agreement AirBnB and the municipality have agreed to prevent and reduce illegal vacation rentals and share information.
Due to rising prices of hotel rooms the AirBnB supply is growing. Currently the city offers 13,849 listings. The estimated occupancy is 26% and the average ADR €133.
The number of overnights booked by tourists in Amsterdam grew again in 2016. In the first nine months of 2016, the number of overnight stays grew 7.4% on average. For 2016 Schiphol expects to welcomed 63.6 million passengers, an increase of 9.2% (including transits).
The city is to draw international attention with the Amsterdam Dance Event, which attracted as many as 365,000 visitors in 2016. Also the city’s top ten museums attracted a record number of visitors in 2016: approximately 7.8 million.
The hotel stop policy is likely to drive hotel values in established parts of the city. This combined with good market performance and a growing economy makes the investment market attractive.
In 2016, the Dutch economy grew by 1.6% and unemployment fell further to 6.0%. This improvement was mainly driven by domestic consumption and investment. The economy is expected to continue to grow steadily at 1.6% in 2017 and 1.8% in 2018 benefiting from improving labour market conditions and low interest rates, in line with the rest of the Eurozone.
Amsterdam’s hotel market saw strong growth in 2016 of 3.1% in RevPAR, driven by an increase in ADR as occupancy remained flat. This trend is projected to continue into 2017 and 2018 with ADR prices driving RevPAR growth while occupancy remains relatively flat.
Our suggestions: 20 Must-Read Books
Some strategies of raising capital: Bringing Your Company Public, Exploring Alternative Capital-Raising Strategies, Refinancing and Minority Equity as Partial Exit Strategies, 5 Alternatives To IPOs, How to Raise Capital For a Company in Financial Troubles, 7 Private Equity Strategies, Why Successful Business Owners Sell Out, The Six Types of Successful Acquisitions, Race to Become a Global Player, Refinancing and Minority Equity as Partial Exit Strategies, Guide To Equity Release Or «Cash-Out»
12 Oct, 2018
The popularity of products from Apple Inc. could hurt jewelers this holiday season, according to some analysts. Apple recently rolled out three new smartphones and a new Apple Watch, and those items...
01 Oct, 2018
Business partnerships are a little bit like marriages. A lot of them don’t work out and some end badly! Give your small business partnership the best chance for success by following these tips....