European Hotel Rates Again Battered, But Some Autumn Stabilization Seen

Data released by Smith Travel Research Global this week showed that European hotel occupancy, rates and revenues continued to plummet in March, though the firm said those metrics should begin to stabilize in the fall.

Occupancy in Europe dropped 8.9 percent from March 2008 to 53.8 percent, according to the data, while the average daily rate fell 9.6 percent and revenue per available room dropped 17.7 percent. The rate drops follow the decline in occupancy from earlier in the year, after which hoteliers dropped rates to stimulate demand, according to the firm.

Northern Europe—Scandinavia, the Baltic states, the United Kingdom, Ireland and Iceland—fared a bit better as a region in terms of occupancy, which dropped by 5.6 percent to 58.6 percent. Its rate and occupancy drops were steeper, however, down 15.6 percent and 20.3 percent respectively.

Smith Travel Research Global managing director James Chappell said year-over-year comparisons should begin to flatten in the coming months.

"What shouldn't be forgotten is that the first eight months of 2008 were very strong, so year-on-year comparisons are by definition exaggerated," Chappell said in a statement. "The reverse may well be true towards the end of the year, and comparative results may start to stabilize from September onwards."