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Lodging in Western Europe

September 2019

Short-term rentals and luxury hotels are shaping the lodging environment in Western Europe. The affordability and flexibility of short-term rentals resonates with consumers, while luxury hotels are driven by the unique experiences and differentiation that they can offer. Airbnb is the leading brand in Western Europe and launched Airbnb Luxe in 2019 to tap into the luxury trend. The region is set to grow modestly, due to maturity, and short-term rentals growth may slow as regulatory pressures eme

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Key findings

Modest growth despite maturity

Western Europe is the third largest lodging region, and is being shaped by the short-term rentals and luxury trends. The region will witness only modest growth over 2019-2024, due to its maturity. Turkey is expected to perform well, due to further investment in tourism and recovery following terrorist attacks, while Brexit in the UK will continue to be a challenge.

Short-term rentals continue to disrupt the market

Short-term rentals continues to disrupt lodging in Western Europe and is outperforming all other lodging categories in the region. Its affordability, flexibility and “experience the local” element resonates with consumers, particularly younger generations. There is evidence that the trend is starting to spread to older generations, for instance in Spain. The category is, however, expected to see growth slow over 2019-2024, as various countries, such as Spain, Italy and Netherlands, start to impose stringent regulations. Recent regulation in Madrid with regard to short-term rentals is expected to affect 95% of properties in the city.

Airbnb emerges as the leading player in Western Europe

Airbnb has leapfrogged the major hotel players to become the leading brand in lodging in Western Europe. Increased numbers of listings and greater consumer trust in the brand have contributed to growth. In 2019, Airbnb launched Airbnb Luxe to tap into the luxury trend by offering premium properties, such as castles. The brand is seeking differentiation in the crowded French market by acquiring Luckey Homes in 2018, to focus on luxury.

Luxury and upscale hotels drive growth

Luxury and upscale hotels are fueling growth in Western Europe, and represent the second fastest growing category. Premium is emerging as a differentiating factor, and more brands are investing in luxury offerings. France, Spain and other well-established tourist destinations are seeing consumers trading to the luxury segment. Marriott, for example, will open more premium hotels in Spain over the next few years. In an era when consumers value unique experiences over tangible products, luxury hotels can unlock opportunities.

Introduction

Scope
Key findings

Regional Overview

Western Europe: a mature region seeing slow growth
A resilient regional environment despite some volatility
Mid-market dominates while short-term rentals and luxury fuel growth
Short-term rentals thrive in highly fragment markets
Luxury hotels and short-term rentals see significant value growth
Short-term rentals grow, but major concerns emerge

Leading Companies and Brands

Domestic brands thrive in a highly fragmented market
Airbnb Inc emerges as the leading player in Western Europe
Brand concentration few countries, while Airbnb diversifies
Short-term rental players leapfrog competitors

Forecast Projections

Positive outlook despite maturity in the region
France sees growth in upmarket segments, while Turkey recovers

Country Snapshots

Austria: market context
Austria: competitive landscape
Belgium: market context
Belgium: competitive landscape
Denmark: market context
Denmark: competitive landscape
Finland: market context
Finland: competitive landscape
France: market context
France: competitive landscape
Italy: market context
Italy: competitive landscape
Greece: market context
Greece: competitive landscape
Germany: market context
Germany: competitive landscape
Ireland: market context
Ireland: competitive landscape
Netherlands: market context
Netherlands: competitive landscape
Norway: market context
Norway: competitive landscape
Portugal: market context
Portugal: competitive landscape
Spain: market context
Spain: competitive landscape
Switzerland: market context
Switzerland: competitive landscape
Sweden: market context
Sweden: competitive landscape
Turkey: market context
Turkey: competitive landscape
UK: market context
UK: competitive landscape
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