It’s not a surprise by now that the hotel market all over the world is not doing pretty well. Compared to last year, revenues went down, occupancy rates went down and things are moving slowly. Hoteliers are reluctant to predict a better future.
However, according to this article about the European hotel chain market in August 2009 , the rate of decline of the revenue per available room (RevPAR) was slower for most cities than in the first 8 months of 2009. Seventy percent of the hotels participating in the survey experienced a decline in occupancy levels, while 90% experienced a decline in room rates. Also, with the exception of Berlin, all cities showed a decline of profitability in August 2009 compared to August 2008.
Over all, July was a better month than August for the entire European hotels market. Hoteliers believe that the worst of the declines have already happened but the recovery will be a slow process.
Central-Eastern Europe Hotel Market
Vienna, Prague and Budapest were hit badly by the decline of RevPAR in August 2009. Out of them, Prague took the hardest hit (almost 25% drop) and it was mostly due to the decline in international tourists numbers. On the other hand, Vienna reported a decline in visitors from UK, Spain, France and Russia but the US tourists numbers increased (and so did those from Germany and Italy). The economy in the above mentioned cities is not the only one affecting the rate of recovery so it is hard to estimate what the future has in store.
Western Europe Hotel Market
In Western Europe, the cities took the hit for other reasons than just the bad economy. RevPAR in Munich dropped with 30.3% in August 2009 compared to last year. This is mostly due to the fact that last year Munich hosted the European Society of Cardiology Congress, but it was moved to Barcelona this year. Plus, Munich is very popular among Middle Eastern guests but the Ramadan fell during the last week of August this year, which also led to a decline in profits.
The future
Fall is the traditional low-season when it comes to traveling in Europe and it will be interesting to see the statistics for the following months. The deals available for the winter holidays are unbelievably cheap which only reinforce the fact that hoteliers are struggling to keep the business going.
Photo by Cristina Dima and cannot be used without permission.