European hotels look on the way to recovery after a major consultancy reported their first rise in revenue per available room (RevPAR) for three years.
MKG Consulting said that European RevPAR rose by 3.7% in 2004 compared to 2003 and predicted that it would continue to rise in 2005.
Its preliminary report on 6,000 European hotels with 600,000 rooms, said rooms revenue, including tax, had risen by 5% during 2004 to 24bn.
The recovery is led by hotels in Britain and Austria where the recovery was “well underway in 2004 with sustained growth in RevPAR, MKG said. It noted that these two countries had been hit “earliest and hardest” by the 2001 slump in business.
But one of the nest recoveries was in Germany where the RecPAR rose by $5, above the European average.
The report said the German hotel industry was marked by generally low occupancy levels, large occupancy differences between weekdays and weekends, falls in occupancy in the summer and “a large dependence on business customers.”
It added that the German industry tended to hike up rates during fairs and exhibitions but this was difficult as many cities had an overcapacity of hotel rooms.
France had a below European average rise of 2.3% in its RevPAR but with the large supply of budget rooms, it is less subject to rises ands falls in business.
MKG said the industry was still beset by the poor Euro/Dollar exchange rate and high oil prices but said 2005 should be a good year.
“The midscale and upscale segments, more sensitive to the business climate, should notably register significant improvements in their RevPAR.
“France and Germany should see their results progressively come closer to those of the United Kingdom, which has is already well in its recovery phase this year,” it said.