The PricewaterhouseCoopers (PWC) European Cities Hotel Forecast is out revealing high expectations for growth in the coming year. According to the report economic signals show 17 to 18 major cities in Europe, many suggested to benefit from the 2014 European forecast.
Exploring revenue and occupancy framed against influential megatrends, this most recent PWC report also addresses challenges facing Europe hoteliers. Focused crucial gateway cities, this report takes into account those cities where growth a byproduct of necessity, and where others face barriers such as stability and supply and demand.
Cities predicted to have the greatest revenue per available room (RevPAR) growth in 2014 are Dublin, London and Paris, Edinburgh, Berlin, Frankfurt, Vienna and Moscow, according to PWC. Strong demand in London and other cities is one deciding factor PWC used, obviously. Below are the megatrends leveraged in determining the forecast:
- Shifts in global economic power: as the economy shifts from west to east, the number of tourists from emerging economies is expected to increase. Hotels need to take advantage of this trend.
- Demographics and social change: The aging clientèle in the west, stagnation in the median income earning bracket, and social change bear heavily as trends to watch and adjust to.
- Technological breakthroughs: Tech has driven social media and mobile in particular to the forefront. Hotels will need to ramp up their understanding and channel mastery in these areas.
- Sustainability, climate change and scarce resources: Resource usage and emissions are unsustainable and hotels will need to explore mitigation and/or adaption for real and PR effects for their brands.
Among the issues hotels face, consumer confidence, the costs of doing business, regulations and taxes, and alrernatives to hotel stays such as AirBnb villas and homes factor heavily in adjusting the forecast. Dr. Andrew Sentance, Senior economic advisor to PwC offered this in addition to the megatrends variables:
“There is growing optimism in the European economy which is now recovering from the double-dip recession triggered by the euro crisis. Significant improvements in confidence and activity through the second half of 2013 mean that we now expect growth across Europe in 2014 and 2015 – even in the economies at the centre of the economic crisis. The challenge for the hotels industry will be to capitalise on this improving economic climate whilst responding to the megatrends impacting their business”
At least where upscale accommodations are concerned, 2014 appears to be an upward trending positive for hoteliers on the old continent. This Hospitality.net report last month showed the upscale segment driving the industry with a 4.6% improvement of its Revenue per available room via a report by the Global Business Travel Association.
Finally, according to the PWC report, by 2017 some 3 billion people will have access to the mobile internet. Mobile and tablet hotels bookings by then, are expected to overake traditional web based booking methods. Travel consumers are now leading the way to a fully mobile technological shift in all business sectors, and especially where travel is concerned.
For more data from the study, please visit the PWC website here.