Industry

European Hospitality Industry could slump by 50%

// jb

Many hotel beds stay empty this year; photo by Jeremy Bishop on Unsplash

According to research data analyzed by ComprarAcciones.com, European hotel revenue could slump by as much as 50% during the year. Based on an HVS report, the sector’s transaction volume fell by 69% in 2020 to €8.5 billion down from a peak of €27.1 billion in 2019, according to the report. The figure was, however, higher than the €3.1 billion recorded in 2009 following the Global Financial Crisis.

A study by S&P Global attributes its potentially dismal forecast to the fact that the hospitality industry will be among the last to recover from the pandemic. Travel restrictions and social distancing are some of the factors taking a toll on the industry’s performance. It forecasts that in the next few years, business travel could fall by as much as 10% to 30%.

More than 48% of the European hotel industry’s annual transaction volume in 2020 was recorded in the first quarter. Transaction volume in January and February alone was €2.7 billion, 2.5% higher than in 2019. As a result of the pandemic, the number of transactions fell by 66% to 291 for the whole year.
While stakeholders have been hoping for a rebound this summer, travel restrictions make the outlook rather bleak. According to Allianz analysts, the European independent hotel sector will only regain a quarter of its 2020 declines this summer.

If restrictions remain through summer, Goldman Sachs projects that Southern Europe will lose up to 1.3% of its GDP growth. However, with the region progressively lifting restrictions, demand should rise significantly. Annual accommodation turnover for 2021 could rise by 28% in Europe according to Euler Hermes. But it will still be around 39% lower than the 2019 high.

The full story, statistics and information can be found here.

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