Higher room rates this summer have allowed hotels in Europe’s major cities to surpass pre-Covid profit levels, according to the latest data from industry analyst STR.
Properties in Berlin have benefited the most from a summer surge in business with gross operating profit per available room (GOPPAR) reaching $34.32 in July, an increase of 83 per cent compared with the same month in 2019.
Although occupancies across Europe remain around 10 per cent lower than pre-Covid, average room rates have risen by 27 per cent on 2019 levels due to strong demand from both leisure and business travellers.
Other European cities to record higher profits include Paris where hotels achieved a GOPPAR of $312.64 in July. Meanwhile London had a profit level of $172.11 per room and Amsterdam’s hotels made an average profit of $97.65 - both of which were around 5 per cent above July 2019’s figures.
Alex Robinson, STR’s director of industry partners, said: “In July, London and Paris both reported occupancy at 85 per cent, which was almost double what it was the year prior. While occupancies have leapt forward, it has been room rates that have been the key driver of recovery.”
Robinson added that Athens, Edinburgh and Rome were also “standout performers” during July.
“While concerns may shade European economies in the medium term, European hoteliers have been experiencing a sun-filled recovery in recent months,” said Robinson.
Travel management company CWT has predicted that global room rates are likely to continue rising for the rest of the year and through 2023 as the recovery continues and higher costs push up prices.