Room rates could be slow to recover
Despite a steady recovery in hotel occupancy rates in Europe, it will be some time before rates return to normal, according to industry experts.
The trend displayed by a number of recent hotel surveys is that hotels in Europe and the Middle East are showing signs of recovering occupancy. However, hoteliers in both regions have discounted room rates to attract customers.
A Deloitte and Touche survey found that RevPAR reached its lowest point in Europe and the Middle East in July 2002, at $67 and $45 respectively, and is now on the way up due to increased occupancy. The Hotel Benchmark Survey, carried out by Deloitte and Touche tracks the performance of 6,000 hotels outside of North America.
However, the survey reported that room rates were still down in 2002, by 3.7 percent in Europe and 4.7 percent in the Middle East, from 2001. It said: “…when average room rates have been slashed to bring in customers, it can take upwards of three years for real room rates to catch up to pre “crisis” levels. Occupancy rates, however tend to recover quickly once the external environment settles down”.
A recent survey of UK hotel performance in October, carried out by PKF found similar results. In London occupancy rose 20.6 percent in October year-on-year, to 77.2 percent. In the regions, occupancy rose 2.9 percent year-on-year, to 74.7 percent.
However, room rates in London fell by 0.7 percent in October to £104 and in the regions, rose marginally by 0.6 percent to £63.
PKF managing director of hotel consultancy, Melvin Gold said: “The figures for October suggest that recovery is continuing but still at a slow pace. We would expect hoteliers to continue to look at building occupancy before room rates can increase and so it’s encouraging to see occupancy figures moving in the right direction.”
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