Demand outruns supply in midscale hotel segment

Midscale segment in Europe appears to have biggest potential

It’s the smallest segment of the development pipeline in Europe, but midscale chain hotels may represent the biggest potential for growth, particularly if the downturn persists. Only 3,353 rooms were added to the midscale segment over the last 12 months, STR Global’s June pipeline summary states. Rooms in the segment represent only 6.4 percent of the total active pipeline, the smallest for any segment.
Yet the growth in demand for the segment in Europe, at 2.4 percent, is outpacing supply growth, at 0.8 percent, STR Global says.
Olivier Derycke, vice-president of international operations at the Louvre Hotel Group: “For midscale brands, when the global economy is in recession the local economy can partly replace some of the business lost.”
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[pictured: Four Points Sheraton Toronto Lakeshore]