Tourism has been one of the worst devastated industries by the COVID-19 pandemic. How do European hotels manage to survive during this event? Let’s find out!
In most European countries (Spain, Italy, etc.), authorities had given direct orders to close down hotels for the lockdown period. Germany didn’t issue such edicts, however, according to STR’s European Hotel Performance Update, hotel occupancy dropped to its minimum of 4–5% naturally: cancelled business trips, events, suspended air travel. People stopped travelling, and the hotel business was thrown into disarray.
The reopening of European borders set the industry on a course to recovery, albeit a slow one. In general, the hotel industry in Europe (current occupancy levels around 40%) is recovering slower compared to the US or China (occupancy just under 50%).
According to McKinsey, in early May, US luxury hotels occupancy was at 15%, while economy class hovered around 40%. Hotel stock prices dropped 60% since January 1, thousands of hotels have closed down for good — and McKinsey experts believe the market will recover no earlier than 2023. Whether or not this forecast works, time will tell.
