The Dutch hotel sector: a long, phased and rocky recovery

The hotel real estate sector has suffered heavily during the pandemic. Unfortunately, that suffering will continue for a while. Although some real estate sectors and user markets are seeing an end in sight with regard to the crisis, there is still a phased recovery underway for hotels. The first step is welcoming travellers again, the next is building up reserves again. In the meantime, they will need to survive with a combination of government support and the flexibility of property owners. However, the question remains – when will hotels be able to look forward again, and what does their road to recovery look like?

Worries right below the surface

Upon first glance, there doesn't seem to be much going on. It’s true that hotels are having a hard time, but that also applies to more sectors. There have been relatively few bankruptcies so far due to corona. Yet upon closer inspection, you find that hotels are being kept alive through a combination of drip-feeding by government support and owner flexibility. The damage to the sector will only become apparent when those two respective ‘IV lines’ are disconnected.

In addition, there was a glimmer of hope for many entrepreneurs in those sectors where (government-sanctioned) measures were minimally relaxed. Cafés, restaurants and shops saw visitor numbers go up quickly in the summer of 2020 as soon as they had permission to re-open. But most hotels depend on travellers, who mostly visit from other countries. In addition, it doesn't look like tourists and convention attendees will be heading our way anytime soon.

There is no collective recovery

There have been some predictions made that the hotel market will pick up in 2022 and fully recover by 2023. Our advice: please don't invest your hopes in this type of generic recovery prediction. First of all, you have to ask yourself when exactly you reached the state of ‘recovered’ – is it when you’re back in the black? Or when profits fall back in line with 2019 levels – which was an exceptional year for Dutch hotels? Additionally, it is impossible to speak of a single market. You cannot compare a family-run hotel in the Veluwe to 400 rooms inside a business hotel near Schiphol.

1. Occupancy levels 2. Room rates 3. Recovery

Recovery does not begin when the first guest checks-in. It’s a rocky road ahead and recovery will take place in phases. It begins with the return of demand, and thus higher occupancy levels. All hotels will soon be targeting the same guests, particularly around the business centres within the Randstad area. Even though there have been warnings in the market against pulling stunts, there has historically been a wait for price wars to start, which only ends when enough travellers book rooms. It’s only at that time when you will be able to talk about recovery.

When’s it your hotel’s turn?

Many hotel owners have been flexible with rent payments for over a year. They can't suddenly stop being flexible as soon as the first bookings start trickling in due to the long and erratic recovery process. Therefore, owners will have to adjust their expectations, take a realistic look at their calendars and ask themselves when their hotel will begin to see better days. For instance, when first passenger flows get underway within the Netherlands; and when and if business travellers can be expected again. You can make informed decisions when you know when it's your turn. For example, you can collect rent flexibly or to look for temporary alternatives, such as transformation, or focusing on leisure guests.

Needs driven by corona measures

As an aside, there is no shortage of demand of course. On the contrary: people cannot wait to finally travel again but are held back by restrictions. Many Dutch workers have received their holiday pay and haven’t spent it, which has created a reservoir of disposable income. That economic potential will result in recovery of room capacity levels, once the Dutch PM Mark Rutte gives the green light to the country, and there have been a sufficient number of vaccinations on a European level. Firstly, for leisure hotels, since they rely on travellers from the Netherlands and neighbouring countries; and secondly, for hotels that depend on business guests – if they come back at all, given what ‘Zoom’ and the like have enabled us to do.

CBRE Recovery Index

CBRE has developed a tool that we can use to determine when your hotel’s recovery is likely to begin and the regeneration phase you are now in. We call it the CBRE Recovery Index. It measures your real estate, looking at elements such as location, target group, market, room size and building age.


Please contact if you like to discuss the restoration challenges facing Dutch hotels, when your hotel real estate is likely to return to an upward trajectory, or if you would like more details about the CBRE Recovery Index.