The improving economic outlook across the Eurozone and strong demand from international tourists is set to propel hotel trading across most cities in 2018, according to the PwC.
PwC’s seventh Euro Cities Hotel Forecast says Europe welcomed 671 million overnight visitors in 2017, with international tourism arrivals delivering 8% year-on-year growth.
PwC also analysed the prospects for the hotel sector in 12 national or regional capital cities for 2018-19 and concluded that the majority of cities, except Frankfurt and Zurich should achieve revenue growth in 2018, with all cities expected to see further growth in 2019.
Growth is being driven by a robust Eurozone economy and travel demand with the UN World Tourism Organisation forecasting a 4-5% growth in global tourism for 2018.
London and Amsterdam hotels are also forecast to to have the highest occupancies of 82% in 2018 despite high supply additions. Prague (81%) is close behind with Lisbon (78%), Berlin (77%) and Porto (77%) all with occupancies in the high 70s.
In 2019 Prague joins London to have the joint highest occupancies (82%) with Amsterdam next (81%) followed by Lisbon (79%).
The Pwc also found that European hotel deal activity rose by 11% in 2017 reaching €21bn (£18.3bn), surpassing the record level achieved in 2015. The growth was led by the UK and Spanish markets, accounting for 30% and 25% of total European transactions respectively.
Liz Hall, head of hospitality and leisure research at PwC, said: “Continuing global and regional economic recovery should continue to support strong leisure and business demand for travel and hotels. 2017 was a record year for travel and we remain cautiously optimistic and forecast further RevPAR growth in most of the cities analysed. With occupancies already high, we expect ADR gains to drive much of this growth.
“Events also remain a key catalyst for hotel trading with some large fairs and events taking place over the forecast period in London, Frankfurt, Paris and Amsterdam and expected to attract large numbers of visitors.”
She added: “European cities will be looking to capitalise on Brexit. With the European Banking Agency preparing to relocate and the European Medicines Agency generating around 36,000 nights a year, other cities will hope to benefit from corporate relocations out of London.”