The improving economic and business travel backdrop will drive growth for the hotel sector in 2015 and 2016, according to PwC’s latest European hotel forecast. This follows a good year for the hotel industry in 2014, as Europe attracted 20 million more international tourists than in 2013. The majority of cities included in the forecast, save for Geneva, Zurich, and Moscow, are expected to achieve higher growth in 2015 and almost all cities should see additional growth in 2016, with the exception of Geneva and Zurich.
In 2015, the top cities by RevPAR growth, in local currency, are Dublin (8.8 percent), followed by Madrid (5.6 percent), London (4.6 percent), Rome (3.8 percent), Prague (3.7 percent), Porto (3.7 percent), Amsterdam (3.6 percent), Barcelona (3.5 percent), and Edinburgh (3.5 percent).
In 2016, in local currency, Dublin (8 percent) is forecasted to top the RevPAR growth league, followed by Madrid (4.8 percent), London (4.7 percent), Rome (4.4 percent), Milan (4.1 percent), Barcelona (3 percent), Edinburgh (2.7 percent), Berlin (2.6 percent), and Porto (2.6 percent).
“Growth is being driven by a combination of higher ADR and occupancy levels,” says Liz Hall, head of hospitality and leisure research at PwC. “In some countries, higher occupancies reflect a structural shift towards more branded budget hotels as well as access to online distribution channels and greater propensity to travel. In many top performing cities—like London and Paris—which operate at over 80 percent occupancy, this gives hotels the confidence to raise rates and it’s ADR driving the most growth.”
