New European hotel analysis by PwC shows that despite the unsettled times, hotel performance in key cities across Europe remains resilient.
Different themes play out and most cities have bounced back well after declines in RevPAR of up to 20% or more in 2008 and 2009 - although many remain below their pre-recession RevPAR peaks.
Liz Hall, head of hospitality and leisure research at PwC, said:
“Many European cities have managed to wave goodbye to the worst of the recession but some like London, Paris and Amsterdam stand out from the crowd as having shown a particularly strong recovery, supported by the revival in business travel.
“Looking at 2011 and 2012 as a whole, we expect Istanbul, Stockholm and Dublin to join these stronger performers, although the pace of growth in Paris will ease up a bit. And a word of caution, the stellar performance of these global cities may not reflect the state of the hotel sector in the country as a whole. Many provincial markets continue to face challenging conditions, with weak domestic demand.”
The Top 10 cities best placed to grow in 2011 and 2012
European RevPAR forecast
% change on previous year (ranked by RevPAR % growth)
1. Stockholm 11.3%
2. Istanbul 10.0%
3. Amsterdam 9.0%
4. Dublin 8.8%
5. London 8.3%
6. Barcelona 6.4%
7. Madrid 5.1%
8. Moscow 4.9%
9. Rome 4.5%
10. Paris 4.5%
% change calculated from local currencies, except Istanbul which has been converted to Euros
Robert Milburn, head of hospitality & leisure at PwC, added: “It’s not just about growth rates though. In overall terms, the mega-cities such as London, Paris and Amsterdam will continue to dominate, even if we see Istanbul in 2011 and Stockholm in 2012 topping the league tables for RevPAR growth. Comparison of absolute RevPAR levels shows a different story again, with Geneva, and Zurich joining London and Paris in the top four in both 2011 and 2012. All these cities continue to see very strong room rates and Geneva could see ADR reach €265 in 2012.”
The cities best placed to grow in 2012
It’s likely to become lonelier at the top in 2012 as double digit RevPAR growth eludes most cities. While the road ahead still looks positive for most of the cities PwC analysed, the rates of growth are slowing and economic stagnation overshadows many countries.
Liz Hall, head of hospitality and leisure research at PwC, said: “In 2012 we anticipate only Stockholm will manage double figure RevPAR growth, reflecting Sweden’s strong recovery from recession, although its economy is expected to slow in 2012. And after a storming 2011, Istanbul looks set to drop out of the top ten in 2012.
“Even London hosting the Olympic Games won’t push double figure RevPAR growth for the UK’s capital. We expect RevPAR growth for the year as a whole of 8.3%, although the third quarter will clearly be very strong.”
The 2012 cities forecast – top 10 ranking
% change on previous year (ranked by RevPAR % growth)
- Stockholm 17.3%
- London 8.3%
- Amsterdam 6.5%
- Madrid 5.6%
- Moscow 5.6%
- Dublin 5.5%
- Berlin 5.0%
- Geneva 3.3%
- Paris 2.6%
- Barcelona 2.4%
Liz Hall, head of hospitality and leisure research at PwC, concluded:
“Europe has the biggest hotel and travel market in the world, but its cities and its hotel markets are undergoing change. Countries and cities alike are being buffeted by new economic, social, technological, environmental and political currents. Europe has already begun to feel the winds of change as the old economic order shifts eastwards and economic growth becomes more elusive. While some cities will inevitably struggle, hotel markets in other, often bigger and better connected cities should continue to prosper.”
source: http://www.ftnnews.com
