The European hotel sector is set to become the “poster child” of recovery for the next six months, according to the latest data from industry specialist STR.
Average daily rates (ADR) are now, on average, six per cent higher than pre-Covid rates.
Ireland leads the recovery, with rates 21 per cent higher than comparable 2019 levels in May, and is closely followed by Portugal (18 per cent higher) and Spain (14 per cent higher). Germany and Austria are among the slowest to rebound (at six and nine per cent below pre-Covid levels, respectively), largely due to lingering restrictions.
Occupancy rates across the continent are also trending rapidly towards a full recovery. Overall, occupancy has improved to 80 per cent of pre-pandemic levels, as the industry gained strength following an earlier decline due to the rapid spread of the Omicron variant, and is likely to reach 90 per cent recovery in the coming months.
Hotels in Poland (93 per cent), the UK (89 per cent) and Ireland (84 per cent) saw the highest occupancy levels, respectively.
STR managing director Robin Rossmann expects Europe to follow a similar recovery trajectory to that seen in the US, where ADR has surpassed 2019 rates and group demand has reached 90 per cent of pre-pandemic levels.
“There is still so much pent-up demand — we’ve already experienced this for leisure travel, and it’s the same for business travel — and this is increasing week by week. For the next nine to 12 months I believe pent-up demand will drive [hotel business] faster than anybody can forecast using a model,” he said.
Transient demand has fully recovered, while group demand across Europe is currently at 50 per cent of 2019 levels, but likely to increase further. Weekday occupancy rates have rebounded to 90 per cent of 2019 levels, with a full recovery expected by mid 2022.
The STR data, presented on Friday, also indicated that cost – not Covid-19 – is now the biggest inhibitor to travel. However, Rossmann insisted that demand will overcome current economic headwinds and inflation concerns, which will likely be felt in 2023.