European hotel prices are rocketing — here’s where they’re rising the most

U.S. travelers are raring to go ... and surging European hotel prices aren't holding them back.

As the hospitality industry regains its strength after a bruising pandemic, the average cost of a hotel room is rocketing.

In some countries, including the U.S., the current cost of a hotel room even outstrips levels seen before COVID-19 struck, and appears to be rising beyond the rate of inflation.

In Britain, for instance, the average day rate for a hotel room this month is $132.04 (105.27 euros). This price works out to $14.36 (11.45 euros) more than May 2019 and an increase of more than 12%, according to new data from the global hospitality analytics company STR.

Irish hotels have risen even more, up by 21.4% from $146.06 (136.71 euros) in May 2019 to $177.32 (165.97 euros) this month.

Where are hotel prices rising?

According to STR's data, hotel costs have also dramatically increased since 2019 in Portugal, Spain and Italy (by 15%, 17% and 23%, respectively).

The reason for this is obvious: our newfound lust for travel after two years locked at home by COVID-19.

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"We know occupancy levels are increasing, for obvious reasons," says John Hobbs-Hurrell, head of Advantage Global Network — part of the U.K.'s largest independent travel agent group, Advantage Travel Partnership. "The pandemic saw a major downturn in demand for hospitality. But now a lot of [hotels] are welcoming back travelers, be they leisure or corporate, and in response to the fact they've had a period of retraction, it's time to push those rates up."

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In other words, he says, hotels are boosting prices in a bid to claw back the money they lost during the pandemic. "It's become a seller's market," adds Hobbs-Hurrell.

Indeed, STR's data also shows that occupancy levels have risen across much of Europe.

Hotels in Ireland (84.9%), the U.K. (77.4%) and Italy (72.9%) saw the highest occupancy levels.

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STR managing director Robin Rossmann expects Europe to follow a similar recovery trajectory to the U.S., where average daily rates have long surpassed 2019 rates. "There is still so much pent-up demand — we've already experienced this for leisure travel, and it's the same for business travel — and this is increasing week by week," he told Business Travel News Europe. "For the next nine to 12 months I believe pent-up demand will drive [hotel business] faster than anybody can forecast using a model," he said.

In February, a survey by UKHospitality found that prices across the British sector were set to increase by an average of 11% this year. The watchdog blamed the rising cost of energy, food and labor for the hikes — a burden hotels are being forced to pass on to consumers.

Kate Nicholls, CEO of UKHospitality, said at the time: "Omicron has infected the start of 2022 with lower-than-expected trading levels and higher than expected cancellations in hospitality venues.

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"One in three businesses in our sector have no cash reserves left and are already carrying heavy debt burdens."

But now that travel is regaining momentum as it charges past pre-pandemic levels, Hobbs-Hurrell believes hospitality venues will continue to raise their prices in spite of the recovery.

"People want to travel like never before," he says. "I don't think anything is going to change. Will ADRs continue to creep up? Yes, they will."

But he says he also believes it will "plateau out closer to the end of the year" as the post-pandemic travel fever begins to calm.

Hotel prices are not on the rise in all countries, however. While France remains the most expensive nation to book a hotel in, at a whopping $211.20 (197.67 euros) a night, its average daily rate has in fact dropped by 14.9% since 2019.