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How Europe’s Hospitality Industry Survives During the Pandemic

News It is not a secret that this summer is very different due to the impact of the COVID-19 pandemic, and hotels across Europe are struggling to survive in the challenging environment. After slight increases in key metrics in August, hotels in the region experienced troubles again in September. The occupancy of hotels in Europe fell by 51.7% year-on-year in September 2020, reaching 38.9%. This is the lowest result on record. The metric is likely to retreat even further in October as new lockdowns are expected in many countries.

The average daily rate of hotels in Europe was EUR90.78 in September 2020 (-27.2% year-on-year), and the revenue per available room was EUR35.31 (-64.8%). If we look at European countries separately, the picture is not much different. For example, hotels in Ireland reached an occupancy of 37.0% in September 2020 (-58.4%). The average daily rate was EUR102.59 (-29.5%), and the revenue per available room was EUR38.00 (-70.7%).

Domestic travel is the main source of income for European hospitality these days. Staycations help hotels in the UK to keep operating. July and August, which are traditionally very important for hotels in the country, were slightly more successful. For example, the occupancy of hotels in the UK was 57% on August 30. Hotels in London, Manchester, and other big cities had lower occupancy than regional hotels. The occupancy of regional hotels in the UK was 75.7% on Saturday, 29 August (the bank holiday), while the occupancy of London hotels was only 48.7% on the same day.

All gains were driven primarily by domestic sources. As summer holidays are over and no big holidays or events are coming in October and November, hotels in the UK are likely to find it hard to fill their rooms.

The latest months also revealed an interesting trend. Travelers are more inclined to make last-minute bookings now. This customer behavior is easy to understand given that countries are constantly on the verge of lockdown if the disease keeps spreading. For example, as of 5 October, the occupancy on the books of hotels in London was only 14% for the end of the month. This is lower than the average occupancy of the UK’s capital even during the pandemic. The rest of the year is unlikely to bring any good news as the pandemic is not over.


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