Swelling visitor numbers pose opportunities for global cities
27 October 2016
Visitors add an average of 3% to a city’s population every night, posing significant opportunities for hotel, leisure and retail operators, according to new research from Savills.
Savills latest 12 Cities report found that around 901 million domestic and overseas visitors were attracted to the twelve cities examined during 2015, spending a total of 1.05 billion nights in hotels or other accommodation. In some cases, such as New York and London, the visitor populations hosted were the equivalent of another city in themselves.
The split between domestic and overseas visitors varies widely between cities, from 89% of visitors to Moscow from domestic sources to just 40% in London, says Savills, with average accommodation costs per stay ranging from $173 per person in Shanghai to $553 in Dubai.
George Nicholas, global head of hotels at Savills, comments: “As global tourism continues to rise demand for bed space in many city markets is now outstripping supply. For example, Tokyo has had an influx of tourists from China following the relaxation of VISA requirements and the city now has a chronic shortage of rooms, whilst in London the fall in the value of the Sterling is attracting visitors who previously thought the UK’s capital too expensive. The net result of this is that we’re seeing a shift in where investor appetite for hotel assets and platforms stems from, with Asian capital in particular coming to the fore in Europe over the past twelve months. The three transactions to have concluded in London post the EU referendum have all gone to Asian domiciled money, while China Life has just invested nearly $2bn into a select service portfolio of hotels in the United States alongside Starwood Capital. We continue to receive significant interest from Asian investors, particularly those from China and Hong Kong, for hotels in London and across Europe’s gateway cities.”
Yolande Barnes, director of Savills World Research, adds: “It’s not just the market for hotels and hotel land upon which international visitors have an impact. Across nine top global cities including New York, London and Paris, annual food and beverage spend by international visitors totals at least US$21 billion a year and shopping accounts for US$38 billion. Restaurants, bars, cafes and shops are significantly impacted by these revenue inflows so ensuring that there is enough space to accommodate visitors is therefore not just imperative for the hotels sector, but also for the wider city economy.”
Global Head of Hotels
Savills Margaret Street
+44 (0) 20 7499 8644
Savills Margaret Street
+44 (0) 20 7409 8899