According to PwC’s latest European hotel forecast, the European hotel sector is facing a more challenging landscape in 2013, and growth is expected to slow due to the prolonged economic downturn.
Robert Milburn, hospitality & leisure leader at PwC, said: “A return to a steady state of economic growth is not likely in the short term and the hotel industry has to adapt to this ’new normal’ as well as to new trends and challenges facing the sector. Our 2013 forecast depends largely on how the eurozone crisis evolves.
“While currently we expect steady growth in many cities, if the crisis escalates, we may see even less promising results for the hotel industry.
“This year may be largely about the economy, but it will also be about seizing the opportunities created by past investment, a clear strategy and skilful management.”
The report noted that, some cities are however expected to show robust Revenue Per Available Room (RevPAR) growth. These include Paris, St Petersburg and Edinburgh and more modest increases should be seen in Frankfurt, Berlin, Moscow and Dublin. But no double digit gains are expected in any of the 19 cities analysed in the report. The hotel sector in most European cities has proved remarkably resilient, and in fact many cities thrived during 2012.
Four cities are expected to have reached double digit RevPAR growth (in euro terms) in 2012: St Petersburg (14.1%), Dublin (13.9%), Prague (13.1%) and Moscow (12.9%), with almost double digit growth in Berlin (9.6%) and Paris (9.0%).
Liz Hall, head of hospitality and leisure research at PwC, added: “This year (2013) will see St Petersburg, Moscow, Paris, Frankfurt, Berlin and Dublin clear winners in terms of RevPAR growth (in euros). For others we expect little or no RevPAR growth and some, most notably London, will see negative growth. For London coming off an Olympic high, this is perhaps expected and the city will still enjoy high absolute trading and profitability levels.”
Paris tops the ’fullest’ ranking with occupancy predicted at 79.1%, ’the most expensive’ with forecast ADR of €267 and the city with the ’highest RevPAR’ at €211.
