According to PwC’s latest hotel forecast, the improving economic and business travel backdrop will drive growth for the hotel sector in 2015 and 2016. In 2015, the top cities for RevPAR growth are Dublin (8.8%), Madrid (5.6%), London (4.6%), Rome (3.8%), Prague (3.7%), Porto (3.7%), Amsterdam (3.6%), Barcelona (3.5%) and Edinburgh (3.5%).
“The future for hotel deals across Europe is bright as equity rich investors look to invest in the sector and benefit from stronger returns as trading conditions are set to improve,” said Sam Ward, UK hotels leader at PwC. “We believe that RevPAR growth will continue to drive deal activity in key European cities.”
In particular, London is experiencing the highest occupancy in more than 20 years. RevPAR will boost to £122 (US$187.4) in 2015 and £127 (US$195.1) in 2016. In 2015, growth is expected to be driven by occupancy growth of 1.6% taking occupancy to 84 and an ADR gain of 3%, to £144 (US$221.2). With occupancy already at 85% in 2016, PwC anticipates RevPAR growth will be driven almost completely by 4.4% ADR growth, taking ADR to £151.