A new report from PricewaterhouseCoopers (PwC) has revealed trading in the European hotel market is increasing.
The experts attributed this to the improving economic and travel backdrop, with trading in almost all of the 18 cities analysed showing rejuvenation.
Some of the top trading areas in Europe are in the UK, with revenue per available room (RevPAR) growth, recorded in local currency, seen in Dublin (5.2 per cent), London (3.8 per cent) and Edinburgh (3.4 per cent) in 2014 thus far.
These cities are forecast to continue improving in 2015, with London expected to top the growth league at 5.2 per cent, while Dublin (3.8 per cent) and Edinburgh (2.8 per cent) are not far behind.
According to Robert Milburn, head of hotels at PwC, travel prospects in Europe are “brighter” thanks to many consumers looking towards their main holiday rather than other goods and services.
“Business travel is expected to influence hotel trading in Germany, UK and France. Instability in North Africa could also drive more tourism to southern European destinations,” he said.
The report also revealed that London and Edinburgh are among the top performers in the occupancy league table, while Dublin is not too far off the pace.
Edinburgh edges ahead with 83 per cent of occupancy, while London is marginally behind at 82.9 per cent.
London also has the highest RevPar in the UK, standing at €135.50 (£111.37). The UK capital sits behind Geneva (€152.30) and Zurich (€142.70).
It is predicted growth in yields will be seen in 2015, with London one of the main cities that are expected to remain healthy.
The positives for the London hotel market are expected to continue into 2015, with PwC suggesting a 3.8 per cent RevPAR growth will lead to RevPAR of £117.10. This marks an all-time high for the market, with average daily rate (ADR) growth of 3.4 per cent expected to drive this. Rates will climb to as high as £141.60 in 2014.
Furthermore, hoteliers should look to capitalising on the expected positives of 2014 in the following year, with ADR rates increasing by five per cent to £148.70. It is also predicted RevPAR will increase by 5.2 per cent, taking it to £123.30.
Liz Hall, head of hospitality and leisure research at PwC, said: “Occupancy is expected to stay high and rates to see more growth. There will be stimulus to business and leisure prospects as GDP recovery strengthens.
“There are plenty of events to draw in visitors, including the Farnborough International Airshow in July, and a relaxation of Chinese visa rules will also be positive.”
However, it’s not just the capital that will see improvements, with the UK’s regions also expected to see healthy growth.
PwC says the strength of the regional market seen in 2013 will continue into this year, although at a lower rate than in London.
RevPAR growth of three per cent will see it increase to £44.60, marking the highest seen since 2007 in nominal terms. Occupancy is expected to increase too, inching up by 0.9 per cent in 2014 and 0.3 per cent in 2015.
Furthermore, total occupancies will stand at 73 per cent, marking the highest levels recorded since records began.
Ms Hall said: “Demand outside London is tied closely to UK economic growth, so the UK’s accolade as the fastest growing large European economy in 2014 is very positive. Meetings and conferences continue to show some improvement, rates and demand are increasing for some venues but corporates are still seeking savings. 2015 is expected to see more operator confidence and progress on ADR.”