Amsterdam, Lisbon, Porto and Prague lead hotel growth in Europe

24 April 2018

Record tourism in Europe is providing more than enough business to satisfy hotels and the disruptive shared economy led by Airbnb. City hotspots are flourishing across the continent with Amsterdam, Lisbon, Porto and Prague enjoying the strongest growth.

Sidestepping the threat posed by Airbnb and other disruptive accommodation platforms, Europe’s hotels are set to enjoy robust growth in 2018. The continent remains the globe’s premier travel hotspot, so much so that in some countries the novelty of ‘over-tourism’ has become a business talking point.

In 2018, hotels in Amsterdam, Lisbon, Porto and Prague are set to be the EU’s top performers, according to detailed reporting from PwC. The Big Four firm’s ‘European cities hotels forecast for 2018 and 2019’ used Revenue per available room (RevPar), Average Daily Rate (ADR), and Occupancy rates as key performance metrics in assessing local growth prospects.

Best placed for growth

Portugal’s second-largest city is set to furnish its hoteliers with Europe’s highest growth rate in 2018. Porto has enjoyed double-digit RevPar growth for four years running. This year’s projected 10.3% growth tops PwC’s European rankings despite falling far short of the superb 21% RevPar growth Porto clocked up in 2017. Porto offers more than a romantic getaway. The Atlantic city is a cruise and festival giant and home to a thriving startup and tech industry scene.

Further south, in the capital Lisbon, a humming tourist economy is expected to be boosted by added interest in the Eurovision Song Contest and the Web Summit — billed as the biggest technology conference on the planet. RevPar gains of 7% are being projected this year after 2017’s momentous 22% growth. Lisbon has cultivated a strong reputation on the conference circuit and will welcome around 25 new hotels in the next two years. All it needs, suggest the PwC authors, is a new airport to meet demand.

Amsterdam secured second spot on PwC’s city rankings. RevPar growth is expected to reach 7.1% but the report emphasises robust ADR gains as being the primary factor behind the Dutch capital’s success. Last year, more than 6.6 million tourists swept across the city’s canals. In 2019, the European Medicines Agency will complete its move from London and is expected to generate 36,000 extra hotel stays per year.

Revpar rankings

Prague, a favourite of Russian tourists which also entertains a revolving door of weekend trips from western Europe, should achieve RevPar growth approaching 7%. The Czech Republic as a whole enjoys a reputation as one of Europe’s safest destinations, serving it well while France, Germany and the UK endured a wave of terrorist atrocities. 

When in Rome?

This top four are set to easily outperform the eight other cities assessed by PwC in RevPar growth this year. Milan and Paris play catch up with projected growth of 3.9% and 3.6% respectively. In Rome, a paltry 1.8% growth rate is expected but the home of the Vatican and Coliseum still outranks Frankfurt and Zurich where negative RevPar growth is a likely outcome. 

Measured by occupancy rates, rankings for 2018 adapt slightly with London maintaining the top spot that it won in 2017. Amsterdam, Prague and Lisbon follow, with fellow high-performer Porto sitting in sixth spot. In 2019 Prague is projected to join London as the city with Europe’s fullest hotels and a bustling occupancy rate of 82.3%.

Occupancy rankings

PwC is not the only advisory firm conducting in-depth reports into one of Europe’s most lucrative but rapidly evolving sectors. Roland Berger has drawn up its own analysis of the continent's top performing cities by overnight stays. Consultancies can expect to play a more advisory role as hotel clients struggle to get ahead of disruptive factors, particularly the emerging shared economy.

For its part, PwC offered some free advice in the report, intimating that hotels would do well to recognise new accommodation networks as a legitimate and permanent feature of the industry. Big data could prove a valuable tool in helping hotels reevaluate their understanding of what attracts guests and what turns them off.

Belgium’s hotel market back to levels of before 2016 terrorist attack

05 October 2018

Belgium’s hotel market has recovered remarkably from the impact of the terrorist attacks in Brussels, with the occupancy rate now back to the level of before the devastating terrorist event more than two years ago. 

On 22 March 2016, Belgium was rocked by the deadliest terrorist attack in its history. More than 30 civilians were killed and more than 300 injured after terrorists executed three coordinated suicide bombings, one at Maalbeek metro station in central Brussels and two at Brussels Airport in Zaventem.

The attacks left a deep scar in Brussels and cast a shadow on the city’s tourism market, which in its slipstream impacted the entire country’s hotel market as tourists by-passed Belgium to visit places perceived safer, including the north of France and the Netherlands. Data sourced from Horwath HTL, a consulting firm that specialises in the hotel industry, shows average occupancy rates in Belgium fell by more than 15 percentage points in the six months after the attack. In Europe’s political capital Brussels however, the development was even more gloomy, with occupancy rates slumping by more than 20 percentage points  between April and October 2016 

Belgium’s hotel market back to levels of before 2016 terrorist attack

As with most attacks, the tourism industry has recovered with the passing of time. A similar trend was seen in Paris and London after their attacks, while countries such as Turkey, Egypt and Tunisia have also all witnessed a recovery following a nose-dive in tourism volumes. By March 2017, hotels in Brussels were enjoying double-digit growth in occupancy rates, and by the end of last year the year average stood at 71.9%, up from 66.6% like-for-like the year previous. For 2018, the occupancy is expected to reach 73.1%, which if realised would be back to the level of before the attacks.

Tourists from abroad have been a major driver in the upturn. Across Belgium, the share of tourist guests jumped in 2017, from 37% to 46%, and at the same time tourists also enjoyed longer holidays: the total number of tourist overnight stays per hotel room increased by 35%. Cities which are particularly popular among foreigners are the medieval towns of Bruges and Ghent, and the larger cultural cities of Antwerp and Brussels.

Meanwhile, recovery among other segments was much slower. The share of aircrew as part of total tourist flow remained the same, while the share of business guests, conference guests and tour groups all decreased on the back of the strong increase in the tourist segment. On average, a hotel room in Belgium now costs €96 per night, which is higher than the pre-attack average of €92 per night.

The data from Horwath HTL focuses on the hotel segment, and does not include demand and supply for accommodations outside of hotels, including rooms/apartments offered on or Airbnb, as well as Bed & Breakfast and other private properties for short stay rental.