Netherlands: Restrictions for new hotels in The Hague: a short summary of The Hague's hotel policy

Following Amsterdam, the municipality of The Hague has decided to apply restrictions to new hotels and initiatives.

The municipality of The Hague has adopted certain strategic goals to stimulate its economy as part of its 2030 economic policy. One of these goals is focused on making The Hague a more attractive city for visitors and inhabitants. The hotel sector plays an important part with respect to this goal. As the previous hotel policy for the city dated back to 2013, the municipal executive of The Hague has implemented a new hotel policy in 2021, called the "The Hague Hotel Policy 2021" (Haags Hotelbeleid 2021) (the "Hotel Policy"). The Hotel Policy was adopted by the city council in February 2022 and is scheduled to be reevaluated by the end of this year. In anticipation thereof, in this publication, we have summarized the main aspects of the Hotel Policy which introduces restrictions for new hotels and adopts a stricter assessment framework for new initiatives.

Temporarily reducing project supply and limiting project capacity

Like in most cities, the hotel sector in The Hague was heavily affected by the Covid-19 pandemic. While the sector has recovered, the occupancy rate in The Hague is not back at pre-pandemic levels yet. Despite this lower occupancy rate, the municipality had granted permits for over a thousand new hotel rooms in 2021. The Hotel Policy aims at temporarily constraining the growth on the supply side to effectuate gradual growth for the long run.

Similar to Amsterdam, the city of The Hague can permit hotel initiatives on locations where the applicable zoning plan actually allows for hotels. On locations where the zoning plan does not allow for hotels, the city will, in principle, not grant requests which require a deviation from the zoning plan. This is based on the Hotel Policy, which introduces a maximum capacity for new hotel rooms (plancapaciteit) set at 1,000 rooms in total (not annually). As per November 2021, the number of new hotel rooms for which a permit request was filed or adopted already exceeded 1,300. The Hotel Policy can be considered as a moratorium on new hotel rooms.

The limitations imposed by the Hotel Policy will be in place until the average occupancy rate of hotel rooms is back to a minimum of 70% over two consecutive years based on the Digital Night Register (Digitaal Nachtregister). The average occupancy rate in The Hague was 40.4% in 2021. The average occupancy rate for 2022 has not been published yet. This '70% requirement' has been introduced at the initiative of the city council and replaces the milestone of 1,675,000 overnight stay that was originally introduced by the municipal executive. The Hotel Policy as such will be reevaluated after two years.

Assessment framework for new hotel initiatives

In addition to the moratorium on new hotel rooms, the Hotel Policy requires initiators to focus on quality, diversity and distinctiveness in their plans for new hotel initiatives. Initiators should be able to explain why and to what extent a particular concept adds value to the intended location and existing supply.

In order to provide some guidance, the Hotel Policy includes an assessment framework for initiators of new hotel initiatives. Besides the aforementioned quantitative requirement based on maximum capacity (plancapaciteit), the city will apply seven criteria in order to determine whether it can facilitate new hotel initiatives:

1. Diversity and distinctive capability: the municipality encourages new hotel initiatives to diversify the hotel market in The Hague. This could be accomplished by targeting a specific type of guest or by targeting a particular need in the market.
2. Impact on the area: the effect that a hotel initiative can have on its surroundings is important. The new hotel initiative should contribute to the variety of functions in the area. The municipality requires special attention for redevelopment plans for the location and multi-purpose use of the location.
3. Support and connection with the area: new initiatives should contribute positively to the neighborhood. Negative effects that could potentially arise, should be assessed and mitigated by the initiators. Initiators can substantiate this by engaging with local residents and other stakeholders.
4. Sustainable construction and operation: the municipality actively promotes the application of principles of the energy transition and circular economy. It encourages entrepreneurs to take sustainability into account in the construction phase as well as in their business operations. Also, new buildings and large-scale renovations should be delivered without natural gas facilities.
5. Mobility & ease of access: hotels need to be easily accessible and facilities need to be at close proximity to the hotel. Traffic movements should be limited to a minimum. The municipality's standards with regards to car and bike parking should be taken into account. Hotels should be as close to public transportation stops as possible in order to stimulate the use of public transport by guests.
6. Accessibility: new hotel initiatives will be reviewed on physical, social and digital accessibility for people with disabilities. Initiators are strongly urged to involve experts in their projects to make a proper assessment in this respect.
7. Professional partners and project assurance: the municipality prefers that permitted initiatives are actually realized. The municipality therefore assigns great value to proper agreements between owner, developer, end-investor and operator. For smaller initiatives up to 30 rooms, hotel entrepreneurs must submit a feasible business plan, which shows how the parties involved envisage to secure the continuation of the project for the long term.

Conclusion

Contrary to Amsterdam, the Hotel Policy of The Hague is not aiming to perpetually limit the total number of overnight stays. The Hotel Policy has a more protective nature, allowing the current hotel sector in the city to recover from the pandemic. This difference can be attributed to the fact that the number and type of tourists visiting The Hague differs from the masses of tourists visiting the capital.

As the Hotel Policy is a relatively new policy, future hotel developments will need to demonstrate how the policy is implemented in practice. Given the temporary nature of some parts of the policy and the less hectic tourist market in The Hague, the municipality may be willing to apply flexibility and explore various possibilities to accommodate new hotel initiatives.

It will also be interesting to see if the current restrictions will be extended after the reevaluation of the Hotel Policy takes place at the end of this year. Stay tuned for our update on this.

More information?

Should you wish to receive more information or if you have any questions regarding the impact of the Hotel Policy on your business, please contact us.