Mixed Results for European Hotels

by William ASTON on November 27, 2009

Recently there has been some light at the end of the dark tunnel of the global recession.  Consumer confidence is starting to return even though some countries in Europe are still mired in one of the longest economic recessions in modern history.  This has been especially damaging to hotels, which have seen their occupancy rates plummet over the last year.  With less people traveling due to the expense, hotels have been forced to cut room rates back to levels not seen since 2004.  However, there are some signs that things are starting to pick up, as occupancy rates in hotels in some parts of Europe are starting to get back to normal levels.

According to a recent report by STR Global, an hotel researcher, room occupancy rates in Southern and Western Europe have started to pick up over the second half of 2009, but Eastern Europe was still lagging behind.    Cities like Prague, Moscow, and Budapest saw their room occupancy rates fall by over thirty percent and also took a dramatic loss in the all important revenue per available room rate, which is the number most hotels use to judge their success or failure.  However, the largest single city slump was in Lisbon, where occupancy rates have dropped to a meager sixty eight percent.

There were some bright spots in the report, as cities like Rome, Cardiff, Venice, and Dusseldorf saw increases in room occupancy over the same period.  STR Global thinks that these mixed results are typical and may reflect that Europe is slowly starting to emerge from the economic recession.

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