EUROPE REPORT
REVENUE GAINS IN BACK HALF OF LAST YEAR not a sure thing for 2023
HOTELS ACROSS THE CONTINENT ARE DEALING WITH MANY PRESSURES THAT ARE SQUEEZING THE BOTTOM LINE , BUT FORECASTS ARE FOR A STRONG SUMMER SEASON , REGARDLESS .
Contributed by KATHERINE PRICE
Michael Grove , COO of HotStats
to January dropped by 10.4 percentage points in Berlin compared to the same period in 2020 , while Dublin and Paris
IF RATE DOESN ’ T CONTINUE TO GROW OR AT STABILIZE WHERE IT IS NOW , IT ’ S GOING TO IMPACT THE BOTTOM LINE
– MICHAEL GROVE
increased by 4.3 and 8.3 percentage points , respectively . Despite utility costs almost doubling , Parisian hotels ’ rate growth and reduced labor costs have enabled properties in the French capital to increase margin . Especially strong performance is expected for France this year as the host country of the Rugby World Cup .
However , the differences in GOP margin are not equally spread . In the UK , there was only a 1 percentage point drop off at the luxury and midscale and economy ends for the same six-month period compared to 2020 , while midscale and upper midscale saw a fall of 5 percentage points .
“ The high end and the real low end have been the most protected ,” said Grove . “ Midscale and economy hotels run very efficiently , very lean , have fewer operational pressures to consider , and at the high end they ’ ve been able to charge high enough rates to offset these costs .”
Added Hatton : “ The pricing power in the luxury segment allows you to capture and outpace inflation . In upscale and midscale , you struggle to do that because of competition .”
He said that hotels will need to deliver value for money to continue charging high
May 2023 hotelsmag . com 23