Accommodation barometer 2022: what keeps hoteliers up at night?
New research by Statista & Booking.com shows how each of the five biggest economies in Europe faces its unique mix of challenges on the road to recovery in the travel & tourism sector
Tourists are back on the move in Europe. After struggling to stay afloat throughout the COVID-19 pandemic, the European tourism industry is finally in recovery mode, with many local accommodation providers enjoying a more prosperous 2022 than previous years. Many are also expecting further growth in 2023.
Rising energy costs and ongoing macroeconomic uncertainty are two of the biggest concerns shared by businesses across Europe.
But, despite their optimism, hoteliers remain cautious of the road ahead. Rising energy costs and ongoing macroeconomic uncertainty are two of the biggest concerns shared by businesses across Europe. Yet every country has its own set of conditions and challenges, meaning there are no one-size-fits-all policy solutions which can be applied across the EU in response.
That’s why we carried out our European Accommodation Barometer 2022, in partnership with Statista Inc., a survey of 1000 businesses across Europe’s diverse ecosystem of accommodation. Their insights help identify the specific challenges facing hoteliers in each country and their varying priorities for government intervention.
Here’s what our respondents in the five largest EU economies revealed…
Germany
Europe’s largest economy was generally in line with its EU counterparts, with more than half (54%) of businesses reporting that they are currently in a very good state. Looking forward, however, they took a more cautious view, planning to invest in their businesses 11 percentage points less than the European average.
There are several factors which might explain their wariness. Energy costs were by far the most urgent concern, cited by 88% of respondents and 8 percentage points higher than the average. This is most likely because Germany — by far Europe’s biggest importer of Russian natural gas — has been hit harder than most by the ongoing energy crisis brought on by the invasion of Ukraine. Hoteliers’ heating bills are high and they face a range of measures restricting their energy use, as the government looks to wean itself off Russian gas supplies.
The energy crisis has also had a knock-on effect on the German economy, the only one in OECD’s forecast for the European Union to enter recession in 2023. So, although more German respondents (75%) think government policies are important to help their businesses than their European counterparts (62%), they’re more pessimistic about the impact these policies will have.
By contrast, German respondents were the least worried about competition from other countries, most likely because of their massive domestic travel market — more Germans travel internally than they do internationally. As a result, it’s competition from domestic destinations that poses a bigger concern, raised by one-third of respondents.
France
French hoteliers were among the least concerned about the impact of rising energy bills on their business. 61% cited it as a concern, 19 percentage points fewer than the European average. This could be because they’ve been partially protected against soaring costs by the French government’s far-reaching economic assistance for homeowners and small businesses. It has gone beyond its neighbours in this area, which may have reassured French accommodation providers.
Despite the recent interventions, however, French accommodation providers weren’t too positive about government policy. Some 38% of our French respondents thought it would have a negative impact on their business, almost twice as many as those who thought it would be beneficial. This comes as OECD predicts a significant slowdown in economic growth for France next year (2.6% in 2022, and only 0.6% as a forecast for 2023). Some have suggested it’s the tourism industry itself keeping France from entering a recession.
Like their German neighbours, French hoteliers are unconcerned by competition. After all, France is the world’s most popular tourist destination.
Italy
Italy’s accommodation sector feels ready for the net-zero transition. Only around 6% of respondents reported being underprepared, far lower than the European average. This is likely a byproduct of the country’s recent drive towards sustainable tourism, including a new classification for green and accessible hotels. A €530 million tax credit was also introduced to help accommodation businesses invest in environmental resources like renewable energy and efficiency.
Equipping their businesses with the latest digital tools was also an area of strength for our Italian respondents. Just 5% felt underprepared for digitalisation while 64% considered themselves to be in a strong position. Once again, this is no accident. The Italian government has launched a Digital Tourism Hub to help modernise the industry and create a strong digital presence for businesses like accommodation providers. This includes strong investment in digitalisation training.
Spain
In the past six months, the developments of the accommodation business have been viewed in a positive light by the Spanish hospitality sector entrepreneurs and managers alike, 70% of whom stated that it has been good or very good. Occupancy rates in Spain have seen strong growth, with 71% of accommodation managers reporting an increase in the past half-year. Overall, the Spanish market has an optimistic outlook for the future, with 35% expecting their financial situation to improve and just 6% anticipating negative developments.
When it came to the sustainability agenda, the primary concerns for hoteliers across Europe was energy efficiency and waste reduction, but the Spanish respondents highlighted water preservation as one of their biggest issues. This follows one of the worst summer droughts in the nation’s history, with reservoirs shrinking to just 40% of their normal capacity. It has hit the Southern regions the hardest, where the majority of the country’s hotels and hostels are located.
A distinct challenge identified by the Spanish hoteliers was the rising cost of inputs and services. While the European average of concern landed at a 34% mark, it was only 23% in France and a whopping 55% — more than double — for Spain. Considering this issue in aggregate with the topic of taxation and the cost of acquiring staff points to a growing need for the upfront investment that hotels need to make as they try to capitalise on the tourism sector recovery.
The Netherlands
In the Netherlands, the corporate tax rate of 25.8% is higher than the EU average. However, just 11% of Dutch accommodation businesses registered it as a concern, far lower than the European average. And while 29% of Europeans expected government policies to harm their business, just 15% of those in the Netherlands said the same. This speaks to a high level of trust that Dutch hoteliers place in the government, reflective of the wider population.
Indeed, 54% of the Dutch accommodation providers we surveyed also reported having good access to finance, significantly higher than the EU average. There are a number of routes for businesses to access finance in the Netherlands, both through private firms and Regional Development Agencies. With this range of options available, Dutch hoteliers are more confident about getting the investment they need for their business.
Europe’s accommodation sector is a diverse ecosystem of businesses, large and small. Their needs vary massively from country to country so surveys like the European Accommodation Barometer provide important insights to help guide an effective response.
Europe’s accommodation sector is a key pillar of the European economy and, at Booking.com, we are committed to amplifying the voices of those people who contribute to its success.
