Hotels in London are forecast to have the highest occupancies In Europe at 82% this year despite high supply.
This is according to accountancy firm PwC’s latest European hotels forecast ‘Best placed to grow’, which predicts the improving economic outlook across the Eurozone and strong demand from international tourists is set to propel hotel trading across most cities this year.
London is also predicted to have the highest occupancy in 2019, again at 82%.
PwC’s seventh Euro Cities Hotel Forecast says Europe welcomed 671 million overnight visitors in 2017, with international tourism arrivals delivering 8% year-on-year growth. It concluded most cities should achieve revenue growth in 2018, with all cities expected to see further growth in 2019.
London is predicted to have slightly slower growth than other leading European cities, with predicted 0.6% revenue per available room growth this year; 1.9% next year.
Liz Hall, head of hospitality and leisure research at PwC, said: “With occupancies already high, we expect average daily rate gains to drive much of this growth… Events also remain a key catalyst for hotel trading with some large fairs and events taking place over the forecast period in London, Frankfurt, Paris and Amsterdam and expected to attract large numbers of visitors.
“European cities will be looking to capitalise on Brexit. With the European Banking Agency preparing to relocate and the European Medicines Agency generating around 36,000 nights a year, other cities will hope to benefit from corporate relocations out of London.”
London’s average daily rate is the third most expensive in Europe at €162 (£141), and is predicted to have the fourth highest revenue per available room at €133 (£116). The UK market led European hotel deal activity last year, accounting for 30% of European transactions, which overall came to €21b.