European Cities Hotel Forecast 2013: Thriving or surviving

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PwC is delighted to present our European cities hotel forecast for 2013. This second edition features 19 of Europe’s most important gateway cities. For each city, we provide a forecast of occupancy, ADR and RevPAR, as well as the economic outlook and our analysis of the opportunities driving tourism and investment in 2013. All the cities featured are capitals of culture, finance and commerce and together they account for over 650,000 rooms and welcome more than 85 million international arrivals each year.

Success in 2013 is not just about growth

In absolute trading terms, the projected leader board for 2013 is largely unchanged from last year, with Paris, London, and Edinburgh still the fullest cities – although the order has changed and London is expected to be in third place in 2013 compared to first place in 2012.

Thrivers or survivors?

Overall, RevPAR growth is expected to slow in 2013, held back by strong economic headwinds across the eurozone. But there will be thrivers; cities expected to show robust RevPAR growth include Paris, St Petersburg and Edinburgh and more modest increases should be seen in Frankfurt, Berlin, Dublin and Moscow.

Adapting to the new economic normal

Our analysis also shows us that return to a steady state of economic growth in Europe is unlikely in the near future. This being so hotel sectors must learn to adjust to the new economic climate, while at the same time responding to the new trends and challenges that the industry faces.

As part of our research we asked hotel industry leaders about the issues, trends and opportunities that keep them awake at night. What’s at the top of their lists? Changing consumer preferences, the impact of online aggregators on price and distribution; and gaining market share in a slow growth economy where retaining existing customers becomes a ‘must-have’ and the battle for visitors from emerging markets intensifies.

With fewer customers to go round in 2013, loyalty and reward programmes could make the difference to the bottom line.

Data highlights

Which cities are best
placed to grow in 2013?
The story in euros

Which cities are best
placed to grow in 2013?
The story in local
currency

The fullest in 2013:
Paris, Edinburgh and
London all perform
strongly

The most expensive
in 2013: Paris and
Geneva stand out

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