Europe's Chain Hotels Struggled in 2008, Report Finds

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The chain hotels of Europe's major cities reported increasingly tough trading conditions this November, according to the latest HotStats survey by TRI Hospitality Consulting. Occupancy, revenue and profit per available room fell in all of the 10 cities surveyed compared to the same month a year earlier. The global economic slowdown and consequent decrease in international travel caused substantial year-on-year drops in operating profit, also known as income before fixed charges (IBFC).

The HotStats sample of branded hotels in Amsterdam reported the greatest decrease in profit—a 37.6 percent fall in IBFC to approximately $78 per available room. Average occupancy in the Dutch capital fell by 15.8 percentage points to 69.1 percent and average room rate was down by 6.3 percent to around $220.75. Amsterdam’s Schiphol Airport reported falls in passenger numbers after a long period of sustained growth.

In Vienna, occupancy was down by 12.8 percentage points to 63.9 percent, the second lowest in the survey. The opening of nine new hotels over the last year is a further factor in the dilution of Vienna's occupancy. Only Hamburg, London and Paris reported average occupancy above 70 percent, with London reporting 81.5 percent occupancy.

Despite falling volume, of the 10 cities surveyed, five reported increases in rate. Paris put in the best performance with a 3.2 percent rise in achieved average room rate to approximately $283, the highest in the survey. Warsaw, Budapest and Hamburg reported year-on-year rate increases of 2.4, 1.9 and 0.9 percent respectively, which were made on the back of relatively modest performances last year.

In absolute terms, Paris reported the highest daily room sales of $210 per available room and London was in second place with a daily figure of $200. Regarding profit, the reverse was true, London was the most profitable hotel market with daily IBFC of almost $160 per available room compared to Paris in second place with a daily figure of $108 per available room.


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