The Hotel Valuation Index for 2017 was published this week by HVS, a worldwide consultancy business for hotels. The index has suggested that hotels in Eastern Europe have seen an 11% growth in the values of rooms. HVS have suggested the possibility that eastern Europe is benefitting from the tougher times in the west. The Eastern European market has grown from a small starting price, they are now part of a market for affordable holidays as more popular European destinations are getting more expensive, especially for tourists booking and travelling from the UK.
Some of those businesses posting value rises include Bratislava, who topped the list of hotels who have seen an increase in value, with a growth of 18.9% year-on-year. Sofia hotel room values have seen an increase of 16%, while Bucharest saw values increase by 14.6%. Hotels in Budapest and Prague have seen a rise in 9.9% as they become more popular as holiday destinations.
This does not necessarily mean that Western European hotels have failed to see and rises in value. Dublin is one of the areas who have managed to gain from a successful 2015. Hotels within the city saw their values rise 15.5% in 2016. This has been partly contributed to the double digit RevPAR growth caused by a limited supply. As a result of this, hotels throughout Dublin have managed to increase their occupancy level as well as their average hotel rates.
London’s hotels have seen a softening of their hotel values because of a slow start to 2016 and hotels only showing growth in November and December. There was an increase in visitation expected due to the fall in the value of the pound. This however failed to occur and therefore the increased number of hotels open to accommodate the predicted growth limited a growth in occupancy rates. It is thought that issues such as terrorism, Brexit and the uncertain future for the Eurozone countries have all resulted in the decrease of value per hotel room by around 2% throughout Western Europe.