It's similar to what US Supreme Court Justice Potter Stewart said in 1964, when asked to define obscenity. He simply stated, "I know it when I see it." Since STR as a data company did not want to define the category of lifestyle hotels, the data analysts asked Horwath HTL Hungary to identify what hotel brands should be considered as 'lifestyle'. The organizers of the recent HOTCO conference in Vienna at the end of January finally came up with a list of 66 brands, including 956 hotels with 130,514 rooms in Europe.
Major chain lifestyle brands
Of the 66 identified lifestyle brands in Europe, 30 belong to major international chains. Accor has the most brands with its 11 lifestyle flags which are managed under the umbrella of its vehicle, Ennismore. However, most of these brands, with the exception of MGallery, which is fourth-ranked in Europe by room capacity (as shown below), have minimal presence in the region. The Hoxton has 9 properties in Europe and is due to finally open its Vienna hotel on 1 April, following a couple of years delay. The property’s general manager told a group of HOTCO attendees that targeted ADR and occupancy are, respectively, €170 and 70%, which makes for a RevPAR of €119.
STR notes that half of the 66 total brands were only launched in the last 8 years, including, for example, Radisson Red, IHG's Voco, Vignette & Kimpton flags, as well as the hostel concept Selina, or Hilton's Tapestry Collection and Motto, its modular hostel brand. Meanwhile, relatively well-known brands like MGallery, The Hoxton, W or Hotel Indigo, have been around for some 15 years or more.
Marriott brands create volume
As the world's biggest hotel group by room count, two of Marriott flags lead the way in terms of European lifestyle room capacity, with some 26,000 rooms between the chain’s midscale flag Moxy and its upscale soft brand Autograph Collection. Third-ranked The Social Hub (formerly the Student Hotel), as well as Vincci hotels, citizenM, Penta, Brown Hotels, NVX Hotel and Ruby are all small-to-medium sized groups primarily dedicated to the lifestyle segment.
Hyatt's JdV (Joie de Vivre) brand, developed by the Californian hotelier, Chip Conley, one of the pioneers in the boutique hotel business, was acquired in 2018, along with Thompson. Hyatt was able to accelerate the growth of JdV in Europe when it signed an agreement in December 2022 with the German chain, Lindner Hotels to integrate the group’s 31 properties into the Hyatt network under the brand of JdV.
Lifestyle brands ranked by room capacity in Europe
Despite Accor's wealth of brands, Marriott occupies the top two positions. Sources: CoStar, STR, HOTCO as of 30 January 2024
Unsurprisingly, the four leading countries for lifestyle hotel capacity were the UK, with about 170 lifestyle hotel properties, followed by Germany and Spain with over 130 and France, with over 100. Meanwhile, Italy, although one of the largest overall hotel markets in Europe, only had about 50, due to the weak penetration of international brands in the country.
A substantial pipeline
There is a healthy pipeline of lifestyle hotels across Europe. For example, the four leading brands will all see significant growth, with Moxy set to increase its room total by 37%, Autograph Collection by 31%, Social Hub by 46% and MGallery by 18%. However, the biggest relative growth should be achieved by the small German chain Ruby, where total rooms are slated to increase by 65%. Ruby enjoys strong financial backing from the Alexander Otto family office in Hamburg holding a 25% stake in the group.
The leading countries for lifestyle hotels also have healthy pipelines with total rooms in the UK set to grow by 24%, in Germany by 21%, in Spain by 11% and in France by 25%. Italy and Portugal should see even faster growth of 39% and 50%, respectively. Meanwhile, the fastest growth of all should be achieved in Poland, where total rooms should more than double, increasing by 122% - admittedly from a low base.
How does lifestyle perform compared to the rest?
To complete its presentation of European lifestyle hotels, STR showed the relative performance of the segment against the overall market during the past two years. It was revealed that lifestyle hotels slightly underperformed the market in terms of occupancy, but handily outperformed the market by an average of about €40 in terms of ADR, which stayed above €150 during 2023. Naturally lifestyle also outperformed in terms of RevPAR, which averaged about €100 for the two-year period. Across CEE, the picture was similar regarding occupancy, but the outperformance of ADR and RevPAR was less pronounced than for Europe as a whole.
When looking at occupancy by class of hotel, upscale and upper upscale lifestyle properties outperformed, but underperformed in the luxury segment over the year 2023. And the same was the case regarding ADR during last year. / Macy Marvel
