Amidst a difficult global context – marked by escalating geopolitical tensions and enduring cost-of-living crisis – Europe’s travel and tourism sector has defied odds. Research conducted by Statista in partnership with Booking.com, before the summer season, predicted record revenues; and the latest edition of the Accommodation Barometer bore it out. At long last, 2023 became the year European accommodations surpassed the pre-Covid benchmark.
1. A consistent rise in optimism
In the two previous waves of the Accommodation Barometer, seven out of ten respondents consistently reported good or very good business developments. Although the year isn’t over yet, the European travel and tourism sector is on track to exceed hoteliers’ expectations, creating a continuous wave of optimism.
2. Regional leaders
Nordic accommodations have taken the lead, with eight in ten characterizing their summer season as good or very good. The avoidance of scorching summer heat waves might have contributed to their success. Southern destinations, which never go out of fashion, such as Portugal and Italy closely follow, with 76% of respondents reporting good developments in the recent past.
3. Positive economic indicators
Over the last six months, 62% of European accommodations reported increased room rates, a solid rise from the previous period. Occupancy levels continued their upward trajectory, with 68% experiencing an increase, thus reaffirming that the survey results reflect actual occupancy figures.
These positive economic indicators have instilled confidence among hoteliers, with 72% characterizing past developments as good or very good, and 68% viewing their current economic situation favorably. In contrast, only 4% saw adverse developments over the past half a year, while a mere 5% consider the current economic situation negative.
4. A majority expects continued growth
Looking ahead, the majority of hoteliers (59%) are now expecting a positive or very positive development in the next six months, marking the first time in the Accommodation Baromter’s history that this number has crossed the halfway mark. As winter 2023/2024 approaches, the year has already delivered beyond expectations.
5. The cases of Germany, Austria, and the Netherlands
Hoteliers’ sentiments from Germany, Austria, and the Netherlands diverge from the overall EU trajectory, most notably from the upward trend in assessing past and current performance. While the rest of Europe posted an improvement across all 3 waves, these countries have not seen the same continuous upswing as their neighbors.
Germany’s Barometer results, on the other hand, appear to reflect the country’s current economic woes. Although German hoteliers matched their EU neighbors’ assessment of past developments at 71% seeing it in a positive light, the appraisal of the current state of affairs diverged by 19 percentage points – 49% rating it as good or very good in Germany versus 68% average across the rest of EU countries covered by the Barometer.
Optimism for continued growth is even lower, with just a third (32%) of accommodations indicating that they think their business will develop positively in the next 6 months, compared to the EU average of 59%.
6. Chain hotels dominate while investment appetite levels out
The European Accommodation Barometer demonstrates that hotel chains maintain a noticeable edge over smaller, independent accommodations across various economic metrics. Independent businesses are doing well, but chain businesses are doing even better and lead in areas such as access to financing, occupancy, and room rate development, indicating the economic benefits of size and scale.Ultimately, 66% of independent accommodations said that their current economic situation is good or very good, compared to an impressive 75% of branded chains.
Investment appetite among accommodations is beginning to stabilize, with a larger proportion of chains prepared to invest more in their business in the next six months. At Booking.com, we strongly believe that Europe can and should do more to help small travel and tourism businesses. We should also recognize the pivotal role online travel agencies play in empowering independent accommodations to compete with branded chains.
7. Regional distinctions and growing challenges
There are variations across the EU. While European accommodations as a whole are moving along an upward trendline, individual countries face unique challenges. Rising costs, especially in energy prices and staff wages, have presented difficulties for hoteliers in Germany, France, the Netherlands, and the Nordics.
Greece and other southern destinations like Italy, Spain, and Portugal reported robust room rate and occupancy rate growth. The EU average for the positive response rate in those areas reached 62% and 68% respectively, but these four Southern European countries averaged at an even more impressive 73% for room rate and 71% for occupancy rate growth satisfaction.
8. Maximizing opportunities and meeting guest preferences
As the European accommodation sector returned to the pre-COVID numbers, hoteliers’ eternal priority of maximizing occupancy has reemerged in full strength. Listing on digital platforms was nominated as the most effective tool at 51% support, closely followed by offering targeted discounts (49%) and investing in esthetics (43%). Less important were the old-school mechanisms of selling rooms to wholesalers or marketing on traditional media.
European accommodations are adapting to guests’ new preferences for vegan, locally sourced, and packaging-free food and drink options. Focusing on unique customer experiences through culinary choices, such as offering locally grown and sustainable options, has become a priority. Hoteliers are aligning with customer demands while the enthusiasm for AI technology appears to be waning.
The European travel and tourism sector, according to WTTC, is expected to reach €1.5 trillion this year. Without a doubt, our industry is an engine of local economic growth and job creation – adding 2 million jobs in 2022. And, in a world full of uncertainties, Europe’s travel accommodation sector stands as a testament of resilience and innovation.
