A strong resurgence in revpar in several major European cities shows that hotel performance is resilient even in unsettled times, but should not be taken as an indicator of the state of the hotel sector of those countries in general.
That's the message from PricewaterhouseCoopers' latest European hotel analysis.
The study showed that most cities have bounced back well after declines in revpar of up to 20% or more in 2008 and 2009, although many cities remain below their pre-recession revpar peaks.
It judged that London would be fifth best placed to grow its revpar in 2011 and 2012, with a forcecast change on the previous year of 8.3%. Stockholm topped the list, with a predicted 11.3% growth, reflecting Sweden's strong recovery from the recession.
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."
Despite strong growth from cities like Stockholm and Istanbul, major cities like London, Paris and Amsterdam will continue to dominate, Robert Milburn, head of hospitality and leisure at PwC, added.
Looking further into the future, for 2012, it appears unlikely that even London will be able to generate double digit revpar growth, the study said, as the rates of growth slow and economic stagnation overshadows many countries.
Hall 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 10 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."
Concluding the report, she added: "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."
the 2012 cities forecast
% change on previous year (ranked by revpar % growth)
1 Stockholm 17.3%
2 London 8.3%
3 Amsterdam 6.5%
4 Madrid 5.6%
5 Moscow 5.6%
6 Dublin 5.5%
7 Berlin 5%
8 Geneva 3.3%
9 Paris 2.6%
10 Barcelona 2.4%
cities best-placed to grow in 2011 & 2012
% change on previous year (ranked by revpar growth)
1 Stockholm 11.3%
2 Istanbul 10%
3 Amsterdam 9%
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%
By Neil Gerrard
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