Inflation Keeps Hotel Prices Down in Most of Europe But Not in Greece
Hit by inflation, hotel prices in Europe this year have dropped below 2019 levels with the exception of Greece, where increases at 5-star hotels are up by 134 percent over pre-pandemic 2019, said tourism intelligence provider Mabrian.
According to Mabrian’s assessment of August data, taking into account inflation, hotel rates in 2022, despite increases are still cheaper than in 2019 in most European tourist destinations.
In Greece, however, “the scenario is different”, found the Mabrian study. With an inflation rate of 6.87 percent, Mabrian analysts attribute the high increase in rates at 5-star hotels to the recent opening of luxury hotels, which has increased the average value of accommodation in the country.
The study notes that 3- and 4-star hotels in Greece have maintained a rise of 31 percent and 82 percent respectively, compared to 2019.
According to the study, hotel rates in Spain, the UK, France, Portugal and Italy appear to be dropping due to inflation. The declines apply to 3- and 4-star hotels in Spain, the UK, France and Portugal, and to 4- and 5-star hotels in Italy.
“Year-on-year price comparisons can be misleading in a context of instability such as the current one. In Europe, we are not used to dealing with such rates of inflation. Right now, it’s important for the travel industry to focus on profitability metrics like RevPar and GrossPar, rather than price and occupancy. The ADR is highly biased by the evolution of inflation and other macroeconomic factors such as exchange rates,” said Carlos Cendra, director of marketing and sales, Mabrian.
Indicatively, in Greece’s rival market Spain, 3-star hotels increased rates by 4 percent, 4-star units by 6 percent and 5-star hotels by 13 percent compared to 2019, with inflation at 13.55 percent.
In Germany, meanwhile, prices are up by 12 percent at 3-star hotels, 18 percent at 4-star units and 25 percent in 5-star facilities, with inflation below all of those at 10.55 percent.
In Italy and the UK, 3-star hotels marked the largest increase in rates, compared to Greece, France, Spain and Germany, where 5-star hotels recorded the largest rate increases.
In the UK, 3-star hotels reported higher prices up by 7 percent. However, Britain’s 4- and 5-star hotels have lowered their rates by 1 percent and 12 percent respectively, with inflation rate at 12 percent.