Hotel industry to face slower growth in 2013

Kasmira Jefford
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HOTEL sector is set to slow down in all of the major European cities this year, as continuing economic headwinds and increasing competition combine to hold back growth, a new study shows.

PwC’s latest European hotel forecast published today predicts that though 2012 proved a resilient year for the sector, revenue per available room (RevPar) is set to stall in 2013 with no double digit growth expected in any of the 19 gateway cities surveyed.

London is expected to see the largest decline, with RevPar falling back by 7.9 per cent to €134 (£111) as the capital suffers the ill effects of a post-Olympic hangover.

Other cities expected to suffer a decline in RevPar include Madrid at 5.8 per cent followed by Amsterdam, Zurich and Brussels.

Robert Milburn, head of hospitality and leisure at PwC, said: “A return to a steady state of economic growth is not likely in the short term and the hotel industry has to adapt to this ‘new normal’ as well as to new trends and challenges facing the sector.”

Some cities are however expected to show robust RevPar growth. These include Paris, St Petersburg and Edinburgh. More modest increases should be seen in Frankfurt, Berlin, Moscow and Dublin.

Paris, London, and Edinburgh are expected to remain the fullest cities this year – although London is expected to be in third place compared to first place in 2012. Paris, Geneva and Zurich remain the most expensive, with Paris in top place recording a revenue per available room of €211.17.