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Hotel rates in Europe up by 2.1 per cent

Drop in occupancy leads to first fall in profit for hotels on continent in more than a year, according to HotStats

Pictured: Amsterdam has seen a rise in rates and occupancy

Hotels in Europe recorded a 2.1 per cent year-on-year increase in achieved average room rate in May to €174.48, according to the latest worldwide poll of full-service hotels from HotStats.

A 1.6-percentage point decline in room occupancy, to 75.3 per cent, contributed to the first drop in profits at hotels on the continent in more than a year. Following 12 consecutive months of year-on-year profit growth, hotels in Europe recorded a 3.6 per cent drop in profit in May to €75 (£67) thanks to falling revenues and rising costs.

“In line with the buoyant economic growth in the Eurozone and against any predictions from the doomsayers about the fallout from Brexit, hotel profit performance in Europe has gone from strength to strength since October 2016, hitting a high in the rolling 12 months to April 2018,” said Pablo Alonso, CEO of HotStats.

“The positive GDP growth forecasts for the region and record-breaking tourism growth in recent years suggest this is more of a blip than a major cause for concern.”

Hotels in Amsterdam recorded a 1.6 percentage point increase in room occupancy in May to 87.4 per cent, as well as a 0.5 per cent increase in average room rate, to €266 (£236).

Alonso said: “Amsterdam has been one of the most reliable hotel markets in Europe for owners, operators and investors in recent years with performance showing no signs of relenting.

“Whilst recent protests about the ‘Disneyfication’ of the Dutch capital are less than positive, the reaction from local government, which included a moratorium on new hotel development, greater control over properties in the sharing economy and potential investment to encourage tourists to explore ‘Greater Amsterdam’ will buoy local residents and existing hoteliers,” he added.

Paris saw a 3.2 per cent increase in average room rate for the month, to €372 (£330), accompanied by a 2.8 per cent increase in room occupancy.

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