Corporate Travel Restrictions Hit European Hotels
The chain hotels of Europe's major cities reported increasingly tough trading conditions this November, according to the latest HotStats survey by TRI Hospitality Consulting. Occupancy, revenue and profit per available room fell in all of the ten cities surveyed compared to the same month a year earlier.
The global economic slowdown and consequent decrease in international travel caused substantial year-on-year drops in operating profit, also known as income before fixed charges (IBFC).
'November was the first month that many companies implemented new restrictions on travel for their employees. For hoteliers, in addition to the trips not made, this also meant short-notice cancellations,' said Jonathan Langston.
The HotStats sample of branded hotels in Amsterdam reported the greatest decrease in profit - a
37.6 per cent fall in IBFC to 58.72 per available room. Average occupancy in the Dutch capital fell by 15.8 percentage points to 69.1 per cent and average room rate was down by 6.3 per cent to 165.71.
METS, the annual marine equipment trade show in Amsterdam, attracted 6.5 per cent fewer visitors and exhibitors than in 2007, and Schiphol airport reported falls in passenger numbers after a long period of sustained growth.
Leisure demand remains weak
From a leisure point of view, destinations such as Amsterdam, Prague and Vienna experienced fewer hen and stag or cultural overnights. Looking ahead, hoteliers reported that tour groups from the US were getting cancelled due to lack of participants.
'In many key markets, falls in occupancy have widened from August onwards and, unfortunately, any rapid reversal of this trend looks increasingly unlikely,' said Langston
In Vienna, occupancy was down by 12.8 percentage points to 63.9 per cent, the second lowest in the survey. The opening of 9 new hotels over the last year is a further factor in the dilution of Vienna's occupancy. Only three cities in the survey - Hamburg, London and Paris - reported average occupancy above 70 per cent. London was the clear front runner with 81.5 per cent occupancy.
Rate still grows in 5 out of 10 cities surveyed
Despite falling volume, of the 10 cities surveyed, five reported increases in rate. Paris put in the best performance with a 3.2 per cent rise in achieved average room rate to 212.32, the highest in the survey. Warsaw, Budapest and Hamburg reported year-on-year rate increases of 2.4, 1.9 and
0.9 per cent respectively, which were made on the back of relatively modest performances last year.
In absolute terms, Paris reported the highest daily room sales of 157.86 per available room and London was in second place with a daily figure of 150.13. Regarding profit, the reverse was true, London was the most profitable hotel market with daily IBFC of 120.06 per available room compared to Paris in second place with a daily figure of 81.10 per available room.
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For more information contact:
Jonathan Langston, managing director 020 7486 5191
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