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No large-scale sell-off of Dutch hotels due to COVID-19

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Despite the blows of the corona crisis, Dutch hotels were not massively put on sale. In total, 44 Dutch hotels were sold last year, for 326 million euros. That is by far the lowest transaction volume in years. In the record year 2019, it came down to 1.75 billion euros, which is more than five times as much. This year, Colliers expects more transactions. This is concluded based upon market research executed by real estate advisor Colliers. 

“Hotel owners did not immediately run into problems with low occupancy rates, because of the financial stimulus packages from governments, arrangements banks reached with their clients, and the buffers operators built before the pandemic," says Joost Mees, Head of Hotels. "As a result, no massive sell-offs occurred in the Netherlands. Owners who were considering selling postponed this until the corona uncertainty had passed. Investors, on the contrary, were willing to pay less because of the higher risks involved. So, there was demand, but hardly any supply."

Few transactions in the large cities
Next to the lack of supply, the low investment volume in 2021 also had two other reasons. Firstly, mostly small hotels were sold, which logically yield less. In total, 2,399 rooms were sold, an average of 55 rooms per hotel. This is less than the average of 107 rooms in 2019 and 73 in 2020. Secondly, few hotels have been sold in the big cities, where the biggest and most expensive hotels are located.

Amsterdam traditionally has a big impact on the Dutch hotel investment market. The sale of The Albus Hotel on Vijzelstraat was the largest transaction, for almost 25 million euros. Compared to past years, that is the ‘smallest leader”. Ever since 2014, at least one hotel in Amsterdam was sold for at least 80 million euros. Together with the six other transactions, the Amsterdam sales volume totaled 76 million euros in 2021, an unprecedented low amount. In the three years before the pandemic, a total of 3 billion euros worth of hotels were sold in Amsterdam. 

The Netherlands is lagging behind
Compared to Europe, the Dutch investment market is still lagging. In Europe, €16.9 billion was invested in hotels last year. This was 39% less than in 2019, and up by more than € 5 billion compared to 2020. The Netherlands, however, fell short 81% last year compared to 2019.

Mees expects the investment market to pick up this year. “Some owners are only now getting into trouble, because of repayment arrangements or because they want to pay off their debts as quickly as possible. They now expect a higher return for their hotel, because the prospects for the hotel market are more favorable compared to a few months ago. The recovery of the investment market though depends on the development of the war in Ukraine, which brings uncertainty. Investors don’t like risks.”

No large-scale sell-off of Dutch hotels due to COVID-19

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Related Experts

Joost Mees

Head of Hotels Benelux

Amsterdam

I am the founder in 2002 of MD Hotel Investments, a succesfull niche hotel corporate finance advisory based in Amsterdam and the co-founder of European Hotel Capital, a private equity international hotel fund. Since June 2013 I joined Colliers in Amsterdam as Director Hotels and specialised in hotel developement advisory, operator search and hotel financing. 

Curently I am Head of Hotels Benelux, Member of the  Board of Colliers Netherlands and Direcor Alternative Real Estate.

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Hanneke de Vries

Senior Consultant

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Hanneke finished her International Hospitality Management education with a specialization in Real Estate. After her education, she gained experience in the hotel industry. She worked for four years as the Assistant General Manager for a 5-star property where she supervised the renovations and operations. In January 2018, Hanneke started  with Colliers as a Hotel Valuer. After two years working for the Valuations department, she started working for the Hotel Division of Colliers as a Consultant. She works for both the hotel transactions team as the consultancy and advisory team.   

 

 

 

 

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Robert Kuijper

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After a successful internship in 2017, I officially joined Colliers in 2018 as Junior Consultant Hotels. My role as Junior Consultant was to support the Senior Consultants with transaction and consultancy assignments. For example, I have been involved in dispositions and acquisitions of hotels, leasing assignments, valuations, feasibility studies and contract negotiations. Besides, I was part of the Colliers Research team until the end of 2020, where I was responsible for collecting and analyzing market data and writing market stories and publications.

Since the beginning of 2020, I have the position of Consultant Hotels, where I primarily focus on the consultancy assignments within the hotel team. This includes guiding rental assignments, conducting feasibility studies and valuations and advising during contract negotiations. Clients are hotel developers, owners and hotel operators.

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Tom Ras

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I started as a junior research consultant at Colliers in 2021. My main focus will be on Industry & Logistics, and the Healthcare sectors. The research team supports other business lines by providing data and data-analyses. Other main occupation of the research team is publishing articles on different topics within the field of real estate. 

 

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