Hoteliers in Europe should expect a much different year in 2025.
Alex Robinson, director of industry partners at STR, was the latest guest on the Hotel News Now podcast “The Upgrade: EMEA Hospitality News.” Robinson outlined five trends he believed will resonate for the European hospitality industry through 2025:
- Continued strong business on the books.
- Continued strong group and meetings, incentives, conventions and exposition numbers.
- Leisure travel holding onto its pole position.
- Luxury and budget, the best-performing segments in the past few years, further bifurcating.
- Sustainability issues, targets, financing and investments will become more cohesive and even more strategically required.
But hotel supply increases in certain markets could be a factor, Robinson said.
“Supply is not going away despite challenges for project financing and the brands’ increasing focus on conversions, [although] conversions do not impact net supply growth in the same manner as new builds,” he said. “The majority of projects that are opening today were incepted three to four years ago before the change in interest rates, and the cities atop the new supply leaderboard are the usual suspects, which are used to weathering new supply."
One example of a market that can weather new hotel supply is London, which has 6,634 rooms in construction but occupancy growth forecasted in 2025 to be 1%.
“This varies by scale, where luxury, as recently highlighted in the Financial Times, has a glut of openings, which will see occupancy flat to negative,” he said.
One hotel market that has done very well in large but likely will see demand contract is Dublin, Robinson said. The Irish capital has 3,968 rooms in construction but its forecasted occupancy is down 2.5% across 2025.
Hotel demand around Europe surged throughout 2024 due to a packed events calendar, but “there is no doubt there will be a hangover from the megaevents,” Robinson said.
Those events include the Paris Olympics and European Football Championships, as well as a healthy list of trade fairs.
“We saw the powerful impact of trade fairs in Germany in 2024 — Drupa [printing equipment fair] in Frankfurt, where revenue per available room jumped 264%, which still did not eclipse the performance from 2016; similarly with Automechanika in Frankfurt where RevPAR grew 168% but still did not reach the 272% level from 2022,” he said.
For more from Alex Robinson, with some anecdotes about his beloved football club Arsenal, please click the link above.