Best placed to grow: European cities hotel forecast 2011 & 2012

Europe has the biggest hotel and travel market in the world, but its cities and its hotel markets are undergoing change. Countries and cities alike are being buffeted by new economic, social, technological, environmental and political currents. Europe has already begun to feel the winds of change as the old economic order shifts eastwards and economic growth becomes more elusive. While some cities struggle, hotel markets in other, often bigger and better connected cities prosper. For many countries provincial markets have been hit harder than those in the larger cities.

In this report we look forward to 2012 and ask which European cities’ hotel sectors are best placed to take advantage of the changing economic order. Are these the cities of the so called ‘old’ Europe or the cities of the fast growing ‘emerging’ economies such as Istanbul and Moscow? What will be driving the growth? What obstacles do they face? Will the glut of new hotel rooms built in the boom years prove difficult to digest?


Interesting observations from this report:

Many of the cities have managed to wave goodbye to the recession as they continue to recover at their own pace and pattern. Some global cities such as London and Paris have thrived.
Despite considerable uncertainty around the economic outlook, the road ahead still looks positive for most of the cities we have analysed, although the rates of growth are slowing. But the risks are firmly to the downside.
Business travel demand is closely aligned to GDP growth, especially the business investment element of growth. Consumer demand for travel depends largely on disposable income levels. Different macroeconomic variables clearly have a varying impact on cities. Confidence is key and the current outlook is highly uncertain.
The current economic climate and financing drought has slowed up new development across many areas of Europe and while this may have mitigated some of the impact of the recessionary slowdown, the concrete mixers and cranes have still been busy.

Robert Milburn, PwC UK Hospitality & Leisure Leader


Preview some charts inside this report

Click on a figure below to see a full-size version

2012 forecast for occupancy
2012 forecast for ADR
2012 forecast for RevPAR