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Price hikes across Europe as hotel occupancy soars

Hotel occupancy on continent hit the highest level in two years in September, fuelling price hikes, says HotStats

Pictured: Hotels in Madrid upped prices by 17 per cent in September

Hotel occupancy in European hotels hit the highest level in two years in September, fuelling price hikes across the continent.

Extraordinary occupancy levels were seen at hotels across a range of European cities, including Barcelona (88.5 per cent), Budapest (89.1 per cent), Dublin (92.4 per cent), Prague (90.7 per cent) and Warsaw (88.1 per cent), according to HotStats' European Chain Hotels Market Review for September 2017. Overall occupancy was at 82.5 per cent, the highest level since September 2015, when volume hit 82.7 per cent.

The high occupancy levels saw hoteliers hike room rates, with the most significant year-on-year increases recorded in Budapest (10 per cent), Dublin (31.2 per cent), Istanbul (26.8 per cent) and Madrid (17 per cent). The average room rate across the whole region increased 4.3 per cent year-on-year to €180 (£159).

September is a month which is renowned for conference activity across the region and the return of demand from the sector after the summer break has played a part in the rise, according to Pablo Alonso, CEO of HotStats. 

He said: “Hotels in Europe are currently benefiting from very strong fundamentals which are driving top and bottom line performance to record levels.

“Typically, performance levels at hotels across the region peak for the year either side of the summer due to a seductive blend of commercial and leisure demand. This year is no different.”

In Milan occupancy levels reached 86 per cent - almost 14 percentage points above the year-to-date average - and average room rate soared by 17 per cent.

Demand from the meetings and events sector was supported by the European Respiratory Society International Congress, which was hosted by the MiCo Milano Congressi and welcomed more than 22,000 delegates from 130 countries.

Hotels in Madrid upped prices by 17 per cent in September, to €181 (£158), despite a 1.7 per cent decline in occupancy.

Alonso said: “The performance of the hotel market in Spain is very much aligned with GDP movement, which is due in part to the dependence of the economy on tourism. This is no better illustrated than in the capital, where the recovery from the recession and subsequent surge in economic growth has resulted in consecutive years of profit growth at hotels in Madrid.

“That said, whilst after nine long years GDP in Spain returned to pre-recession levels earlier in 2017, profit levels at Madrid hotels recovered their ground some time ago and have since gone from strength to strength on a solid foundation of business and leisure tourism.”

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