Without making any predictions about the weeks ahead and the consequences of the accelerated rate of infection, the recovery of the hotel industry in Europe is well under way. Admittedly, the recovery has taken longer on this continent than elsewhere. In the first nine months of 2021, hotel occupancy stood at 40 %, compared with 56 % in North America, 54 % in China and 53 % in the Middle East, according to specialist consultancy STR. The European hotel industry has only come back to just over half the levels achieved in 2019 (54 %), while North American, Chinese and Middle Eastern establishments all returned to over 80 %. Still down, but on the up. According to Rosianne Kindler, STR analyst for the French market, " the crisis is expected to end in September, with all countries exceeding 50 to 60 % of the levels reached in 2019" . And even better for the UK, a market less dependent on international customers, where visitor numbers are 80 % above pre-covid levels.
Over the first three quarters of 2021, Paris, Lisbon, Rome, Brussels and Amsterdam recorded an occupancy rate of less than 25 %, and between 25 % and 50 % for London, Madrid and Berlin, a clear improvement has been observed since the summer in all these capitals. While Lisbon, Rome, Amsterdam, Brussels and Vienna did not exceed 50 % in September, this autumn saw other major cities surpass this mark, such as Paris (51 %), Warsaw (56 %), London and Copenhagen (58 %), Berlin (61 %), with the prize going to Moscow and Istanbul with 69 % in hotel occupancy. " From September onwards, the main markets returned to weekdays at levels 60 % higher than in 2019some weeks there are as many as 80 %." said Rosianne Kindler during a presentation of these results. At the same time, hoteliers have been able to maintain their rates since the start of the school year, with average prices fluctuating between 90 % and 110 % of what they were before the pandemic.
In addition to Paris, this recovery is also noticeable, even more so, in France's major cities. Driven by domestic travel, Bordeaux, Lyon, Marseille and Nantes saw hotel occupancy return to more than 60 % of 2019 levels over the first nine months of the year, with Lille, the Côte d'Azur and Paris lagging further behind. However, over the period from August to October, the Paris hotel sector recovered its colours with the start of the new school year (63 %), while Bordeaux, Lyon and Nantes approach pre-covid performances - around 90 % - and Marseille is flirting with 2019 results (97 %). All this with average prices often exceeding the rates offered by hotels in 2019.
Lyon, Lille and Marseille, for example, took advantage of trade fairs and MICE events such as Sirha and the International Cybersecurity Forum to boost their hotel occupancy and results. STR is not the only firm to have noted this clear improvement in the French hotel industry. " The resumption of professional events has boosted a new lease of life for the sectorThe occupancy rate has thus continued to rise, and the performance gap is narrowing compared with 2019." said Olivier PetitIn Extenso Tourisme, Culture et Hôtellerie's associate director at the time of the unveiling of the September results showing an occupancy rate of 61 % (-19 % vs. 2019) across France.
Will this upturn continue for the European hotel industry? According to STR estimates based on bookings for the next 90 days as of 22 November, Paris and London maintained on course for the festive season. However, STR also noted that the new restrictions introduced in the Netherlands immediately led to a wave of cancellations in Amsterdam.
Despite the continuing uncertainties, STR expects to see domestic tourism back to normal by 2022 and intra-regional tourism to pre-covid levels by 2024, while long-haul tourism is expected to remain at low levels until then. While leisure tourism will primarily support hotel activity, the research firm also expects a gradual normalisation of business travel - excluding long-haul - in 2022 and an improvement in the MICE segment.
In the end, according to STR, the decline in the occupancy rate, which was 60pts lower than in 2019 at the end of last year, should be reduced to -26pts by the end of 2021 and -8pts by the end of 2022. As for average prices, they should be back to their previous levels by next year. Rosianne Kindler takes a positive view, saying that " demand will continue to recover and exceed 2019 levels as soon as there are fewer uncertainties. The desire to travel and meet up will endure."
