In a European hotel market that remains on an upward trajectory, particularly in the southern regions of the continent, Covivio Hotels has increased the value of its portfolio by 1.5% and generated revenue growth of +7.2% on a like-for-like basis. The group is reorganizing and continuing its asset disposals to optimize the returns on its properties.
The entire hotel portfolio (283 hotels, 39,477 rooms) is valued at €6.439 billion, with €5.818 billion attributed to the portion owned by Covivio Hotels alongside its partners. This represents a +1.4% increase in value on a like-for-like basis for a geographically diversified portfolio (12 countries), categorized (two-thirds in the Economy and Midscale segments, one-third in Upscale), and across 17 partner hotel operators including Accor, Marriott, IHG, NH, and B&B. The average duration of long-term leases signed with operators is 11 years.
This average increase in hotel asset value is driven by peaks of +2% for properties in France, +4.8% in Italy, and +3.4% in Spain. Other countries have not experienced the same positive trend.
The hotel portfolio yields an average return on assets of 6.1% (+50 basis points year-on-year), including 6% for leasehold properties and 7% for properties held as both real estate and operations. This latter figure justifies the portfolio’s reorganization to prioritize full ownership of the assets.
Revenue growth: +7.2% on a like-for-like basis
The overall resilience of the hotel market, notably driven by rising average prices, enabled higher revenues, increasing by +4.1% in absolute terms and +7.2% on a like-for-like basis, reaching €334.6 million compared to €317.3 million as of December 31, 2023.
For the portion of the portfolio represented by leased hotels (long-term leases), accounting for 76% of the group’s generated revenue, income increased by +31.2% for the variable rent portion (22% of revenue) and +4.3% for the fixed rent portion (54% of revenue), all on a like-for-like basis. Hotels located in Southern Europe were the main contributors to this performance.
For the portion of the portfolio represented by hotels held as both real estate and operations, accounting for 24% of the group’s generated revenue, revenue increased by +4.9% on a like-for-like basis year-on-year, thanks in particular to strong hotel performances recorded in Berlin and Nice.
Recurring net income growth of +8% in 2024
Recurring net income (EPRA Earnings) amounted to €258.1 million as of December 2024 (compared to €238.8 million at the end of 2023), reflecting an +8.1% increase year-on-year.
The Net Asset Value (NAV), representing the difference between the economic value of real assets and the economic value of real liabilities, stood at €3.815 billion compared to €3.550 billion at the end of 2023.
Key events of 2024
At the end of November, the group finalized the restructuring of ownership of hotel real estate and operations previously co-owned with AccorInvest, for a total exchange value of nearly €800 million. The aim of this transaction was to ensure that each partner now holds full ownership of both the real estate and the operations of the assets. The transaction involved around sixty properties, with mutual buyouts either of business operations or real estate, to restructure the portfolios.
Three new financing agreements totaling €880 million were secured in 2024, allowing the refinancing of future maturities. In May 2024, Covivio Hotels issued €500 million in Green Bonds with a 9-year maturity.
Covivio Hotels’ net debt decreased to €2.119 billion (group share) from €2.260 billion as of December 31, 2023, with an interest rate of 2.33% at year-end and an extended average maturity of 4.8 years (+1.2 years).
To operate in the real estate market, Covivio Hotels had liquidity (including undrawn credit lines) amounting to €891 million as of December 2024.
Ongoing acquisitions, renovations, and disposals
Covivio Hotels also acquired, for nearly €81 million including duties, a 429-room hotel in Tenerife, Canary Islands, Spain’s top tourist destination, with an average occupancy rate fluctuating between 85% and 90%.
In 2024, Covivio Hotels renovated two hotels in Lille and one hotel in Bruges, as well as a leased hotel operated by Melia in Malaga. These projects represent a total of 458 rooms, €28.5 million in renovation costs, and a yield exceeding 15%.
At the same time, Covivio Hotels signed new disposals amounting to €455 million (group share) (€606 million at 100%). A total of 43 assets in France were sold for €333 million, including 31 hotels under the Accor brand, along with 6 hotels in Germany (€62 million), 4 in Poland (€34 million), 1 in Spain (€17 million), and 1 in Belgium (€9 million).
The sales agreements were signed at an average margin of +4% compared to end-2023 valuation figures, reflecting strong investor appetite for the hotel sector.
