Brussels hotels in structural recovery

Tim Harrup

The recent exceptional autumn weather has had a beneficial impact on the tourist industry, including hotels. Putting this unusual situation aside, it is perhaps a good time to look at the overall state of the hotel market in Brussels over the past couple of years in more structural terms. Real estate advisor Cushman & Wakefield has carried out a number of surveys, which put Brussels in a favourable light. Cushman & Wakefield starts by setting the scene and marking out the situation with which the hospitality market in Brussels has had to deal. More than any other market in the Benelux, they report, Brussels has been subject to severe tremors these past years. Along with successive restrictive covid-19 measures the market had to deal with the November 2015 lockdown in the wake of the 2015 Paris attacks, and the devastating impact of the 22 March 2016 Brussels attacks.

Moving on to the present time, Cushman & Wakefield reports that in an occupancy sense, the market recovered through 2019, even outperforming pre-2015-16 numbers by that stage. Earlier this year the 12-month moving average indicates that the market has moved on from its nadir. Data made available by from April show a 55% occupancy rate, with further indications given by Brussels Hotel Association signaling more improvement with a 66% occupancy rate in May.

There have of course been other major events to affect travel over recent months – rising inflation and the war in Ukraine – and these clearly highlighted by Ed Fitch, Partner EMEA Hospitality Capital Markets at Cushman & Wakefield. “We have seen no effects in terms of travel safety concerns, however one must be aware of the effects of higher inflation and recession on corporate and MICE (meetings, incentives, conferences, events – ed.) travel recovery. Consumers appear to be paying what it takes, likely due to pent up demand for travel post pandemic and consumers having built up savings during lockdowns. We also see plenty of anecdotal evidence that consumers see travel now as almost an essential rather than a luxury.”

Where Brussels is concerned, another survey by the advisor carried out with hotel operators, shows that there are very positive intentions by operators regarding the Belgian capital. Indeed, Brussels scored higher than any other Belgian city in terms of interest by hoteliers (marked at 4.1/5, a 22% growth against the same survey from a year earlier), and fourth highest among major hotel markets in the Benelux. Crucially, the survey indicates that a majority of operators believe Benelux’s capital cities will recover by 2023 or 2024. The survey results were collected from more than 15 international & regional hotel operators that are active in the Benelux region.

Business travel

There is quite clearly a strong public sector presence (large bodies such as the EU, Belgian federal and regional entities, and NATO) as a dependable driver of demand for Brussels And to demonstrate the importance of this, visit.bruusels reports that in 2019, 52.4% of overnight stays in Brussels were attributed to business travellers, corresponding to 4.09 million overnight stays (a 9.3% increase on 2018). The Brussels Regional government is also striving to put Brussels forward as cultural destination of exceptional variety and create further opportunities for hotels to add leisure to the business element. The Brussels Hotel Association recently indicated that weekends (72.7%) are currently doing better than the weekdays (61.2%). Before the global health crisis, weekdays were more successful due to Brussels business travelers, however now more leisure travellers appear to be coming for weekend getaways.

The recent OperatorBeat survey by C&W includes responses from selected international and regional operators who are active/interested in the region and among key takeaways it finds that Brussels is among the top 5 most attractive markets in the Benelux region. Other cities in the Belgium that were listed among top-10 market by international operators were Gent, Bruges and especially Antwerp – where there are several operators who are highly interested in this market.

In terms of recovery pace, according to the OperatorBeat survey, majority of respondents are expecting major regional cities in BeNeLux to recover earlier than capitals. Nevertheless, 68% of respondents expect Brussels to fully recover already in 2023, the remaining 32% of operators expect this in 2024. This is in line with forecast by Oxford Economics, that anticipates the nights in paid accommodation in Brussels to reach 2019 levels by 2024. This is underpinned by Brussels’ lower reliance on long-haul international market.