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Analysis

Delivery of good news for Rotterdam's hoteliers

After seeing its hotel supply grow significantly in recent years, the Dutch port posts particularly encouraging results at the end of this year 2015. Having taken up the bold challenge of an urbanism driven by contemporary design and architecture, this city at the industrial heart of the continent affirms itself as a leading destination for Europe's hotel industry.

While results for the year 2014 were particularly disappointing, with a RevPAR down by -1.5%, the trend appears to be reversing itself on the banks of the New Meuse. It is particularly the increase in occupancy rate that explains this improvement for the hotel sector at the major Dutch port: the latter is up by 6.1 points from January to October - versus only a 2.5 point increase in the Netherlands overall.

Average daily rates remained relatively stable compared to the previous year, with a slight drop by -0.2%. But this produced hardly any impact because with a RevPAR up by 9.8% on the first ten months of the year, this well filled year will leave Rotterdam's hoteliers satisfied and able to adjust prices going forward. After Amsterdam's capital (+11.5%), the second city in the country posts the best results in 2015. And it is about to end the year on a high note, as the takeoff of the RevPAR in October confirms. This spectacular increase may be accounted for by the more than satisfactory occupancy of the city 's hotels - with a 15 point increase in occupancy rate.



Monthly hotel results in Rotterdam from January to October 2015



Rotterdam's performance is indissociable with the fact that its hotel supply recently progressed significantly: on 2014 alone the chain hotel supply grew by 17% for 530 additional rooms. The city welcomed a new ibis hotel, and also the Inntel Hotel Rotterdam Centre with its avant-garde design created by the studio WAM Architecten. But the most significant addition to the hotel supply in the port destination port nonetheless remains the arrival of the brand Nhow of NH Hotels in the biggest building in the country. Occupying 23 out of 44 floors in the titanic building De Rotterdam, overlooking Erasmus Bridge, the 278-room address showcases art and architecture - major assets for the Dutch city overall.

In this context of strong recent growth in the supply, hotel performances in the city had long been below standard in the country, with an average occupancy of 62.5% across the year 2014 (source: European Hospitality Report 2015), growth in the supply thus forced hotels to adjust their prices (-4.5% in 2014).

But this growth dynamic for the supply supported structural growth in demand, amplified by increased competitiveness brought on by the drop in prices. Last year, the number of visitors in Rotterdam's hotels thus progressed by close to 7%. Considering the increase in nights, the change is even more evident: the latter are up by 13% between 2013 and 2014. More generally the hotel industry in the city recovered well in the last five years, after going through a difficult period between 2007 and 2008 when occupancy at Rotterdam's hotels fell by more than 50,000 nights. the benchmark of 1.5 million nights should be surpassed this year as the internationalization of clientèle grows increasingly evident; 51.5% clients belonged to a nationality other than Dutch at the city's hotels last year. British visitors, followed by neighboring Germans, Belgians and French, are more numerous there. 



Change in number of hotel nights in Rotterdam between 2007 and 2014



In 2015, within a European context that is generally favorable for the hotel industry, in which the city's properties have reaped the fruits of this long-term growth in demand through a net rebound in their occupancy rates, which had remained stable in recent years (2008-2014), because of teh global economic context and then growth in the supply.

Hotel demand in Rotterdam relies on business tourism first and foremost: as the leading European port, the city is the site for the headquarters of many international companies (Unilever, Eneco, Robeco, etc.). With the University of Erasmus, the port is also home to one of the finest universities on the continent. In addition to these qualities, Rotterdam nonetheless had to diversify its leisure tourism supply, with an offer that is differentiated from that in Amsterdam. The port city has several major museums, some of which are firmly anchored in modernity, such as the Netherlands Architecture Institute or the Witte de With Center for Contemporary Art. As for urban planning, the city has been undergoing a veritable metamorphosis for twenty years or so.

With the multiplication of cultural highlights and and night clubs such as the WORM, Rotterdam also progressively became an ambitious cultural meeting point. From an events point of view, the Rotterdam international film festival is held each year for a couple of weeks at the end of the month of January. Since 2008, the city has also welcomed the North Sea Jazz Festival, which brings many international artists - and a growing number of visitors. The Rotterdam Marathon, the most popular in the country in the country and one of the biggest worldwide, meanwhile, takes place each April. The event has contributed to strong growth which also contributes to the significant growth n the increase in the RevPAR by 28% observed in 2015.

Thus the city of Rotterdam currently appears to be surpassing the port and industrial city' center center. The ambitious metamorphosis in recent years allows it to finally express its difference, and confirms its new dimension as a design and cultural destination in and of its own. It is hardly surprising that the New York Times and Rough Guides both placed Rotterdam in their Top 10 cities to discover last year. While seafarers are not yet ready to leave the docks or Butch port, they have already been joined by art lovers, night owls, and plenty of other visitors seeking an original tourist experience.

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