Mixed news for European hotels

The latest survey of average room rates in hotels by BTI UK brings mixed news for Europe

The good news is almost entirely for the UK where room rates are rising while on the continent, the industry still seems at best static and at worst experiencing falling rates.

These findings are echoed by several of the large hotel chains in the region reporting that while business is good in the UK, it is not so good elsewhere. Germany is mentioned twice as a country where business is poor.

Mr Chris Hartley, Kempinski's senior vice president sales and marketing, said his group had enjoyed a “good 2004 with the best results since 2000” which suggests a strong recovery by this five-star chain at a time when such properties have been doing worse than more modest establishments.

But he adds: “Business has been very strong in most markets but there are still difficult markets like Berlin. Germany generally has been less strong with the exception of Munich.”

He puts this down to a weak German economy, issues over the economy's structure including the cost of employing people and, in Berlin, over capacity compounded by poor demand.

Mr Kip Horton, vice president sales EMEAEurope, Middle East and Africa for Starwood Hotels, tells a similar story. “There is no question that as business begins to increase in many of our key cities we are finally beginning to see, after a number of years, room rates going up.

“We have certainly seen the UK corporate sales market coming back strongest and most quickly. But some traditional strongholds - for example Spain - have gone backwards in terms of demand levels.

However our biggest concerns still lie with major corporate producing markets like Germany that continue to struggle due to their current economy.”

These two chains are at the top end of the market whose properties do suffer most at time of economic downturn.