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Global hotel sector shows signs of recovery

06 August 2010 by

The global hotel industry has shown signs of recovery in the first half of 2010, although the rate of improvement is mixed and varies according to region, country and specific markets, research has revealed.

The latest bi-annual hotel survey, by corporate travel services company Hogg Robinson Group ](http://www.hoggrobinsongroup.com/)(HRG), shows that the hotel market in Europe and the US appears to be stabilising, with rates either flat or only marginally down.

However, the Middle East region recorded the highest rate decrease, with double-digit falls in the UAE, Bahrain, Qatar and Oman.

Many European cities saw average rate growth, such as Stockholm (13%), Zurich (7%) and Geneva (5%), while five of the top ten most expensive cities worldwide were in Europe: Geneva, Paris, Zurich, Stockholm and Oslo.

London has seen a 1% increase in average rate in the first six months of 2010, after a 4% decline in 2009, and maintains its position at 23rd in the rankings. The increase was driven by a significant increase in corporate occupancy levels and buoyant demand from the leisure sector. The snow and bad weather adversely affected the market in the early part of the year but it rebounded in the second quarter.

Moscow yet again retains its place as the city with the highest average room rate for the sixth year, despite a fall of 12% when measured in local currency. Geneva and Hong Kong were the second and third most expensive cities respectively.

Rates in the US were flat or marginally back compared to 2009 figures, with the exception of San Francisco where average rates fell by 11%.

The top end of the market continues to hold up well, with an average rate increase of 1% in five-star hotels.

Margaret Bowler, director of global hotel relations at HRG, said: "It is good to see the positive effect of certain sectors travelling more regularly. However, it is clear that the rate of recovery is mixed and varies according to region, country and specific markets.

"The challenge now facing hoteliers is to increase rates in line with demand to pre-recession levels, something which many forecasters believe will not happen until 2012 at the earliest."

On the UK market specifically, Douglas McWilliams, chief executive of the [Centre for Economics and Business Research](http://www.cebr.com/), said growth prospects are buoyed by the weak pound, which continues to support tourism and leisure travel.

"In addition, the ongoing recovery of the banking and finance sector will contribute to corporate demand for rooms," he added. "There are, however, significant downside risks to growth in the market emerging from future cuts in public spending."

Design hotels outperform competitors on occupancy and rates >>

Regional occupancy figures show signs of recovery >>

occupancy soars in london hotels during first six months >>

By Daniel Thomas

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