Brussels Hotel Market Bucks European Slump

BRUSSELS-Brussels’ hotels have performed better than many other European cities in the wake of the events of 11 September, which have led to a slump in global travel. According to Jones Lang LaSalle’s new Hotels Updates Digest Europe Report, the Brussels hotel market has been one of the least affected European hotel markets, with room rates holding up to date.

Occupancy rates, as in most markets, have fallen during the months of September and October as non-essential travel was cut and leisure demand cancelled across the world. The month of September saw occupancy levels in quality hotels fall by 11.8% to 76.1%, while October saw a further slide of 14.7% to 66.7%. By comparison Paris, Rome, Milan, London, Budapest and Berlin all saw falls in excess of 20%.

Despite this, Richard Eaton-Hart, Senior Vice President at Jones Lang LaSalle Hotels, points to the stability in hotel room rates compared to other major European cities which are witnessing up to a 15% fall in average rate. Quality hotel room rates in Brussels fell by only 0.8% to €130.41 ($116.22) during the month of September. Again the drop in October was limited to 0.5% to €118 ($105.16). He attributes this to Brussels’ lesser reliance on the US sector. ‘Quality hotels in Brussels source only around 15% of total demand from the US market, compared to 45% in London, 35% in Paris and Rome and 24% in Amsterdam,’ he says. ‘Thus the city has not taken such a hit from one individual market’.

Instead the bulk of hotel demand is sourced from corporate and EU-related demand from a wide range of European countries. ‘While travel in the days immediately following the events of 11 September halted, business travel has resumed over the past seven weeks. Of course there are concerns about the economic situation across the EU and both the business and conference sectors are likely to be subject to cost cuts. However, Brussels has not felt the double impact of a slowdown in US business and leisure travel, due to its limited exposure’ added Eaton-Hart.

2001 has seen strong investor interest in the Brussels market with several deals concluded. In April Deutsche Immobilien Fonds AG (DIFA) purchased the five-star, 281-room Radisson SAS for €85 million ($76 million), representing the fund’s first hotel acquisition outside of Germany. This was followed by Hoteles Catalonia’s purchase of the 78 room Hotel Forum Art for €6.6 million ($5.9 million), including an amount for renovation costs. In June Bannimo Real Estate sold the 262 room Swissotel to the Belgian company City Hotels SA for around €40 million ($35.7 million).