Rack Rates in Europe in 2004: slight rises in rack rates

Like in other European countries, the last two years have seen a strong rise in the French hotel industry's figures. Operators' strategies have been strongly felt, since despite the rise in rates reaching 8.2% for a single room in 2002, rack rates remained highly stable last year. At the most, a rise of 0.5% was recorded in 2003 over 2002.After 3 very difficult years, the European hotel sector seems to have adapted to the new given, that international customers (notably Americans and Arabs) are less inclined to cross the globe for their leisure travel. At the same time, the slowdown in economic growth has incited businesses to reduce their budgets, which weighed heavily upon the volume of business customers. Within this delicate context, European hoteliers were able to detect, and avoid, plummeting rates. While waiting for a more significant return to economic growth, they are remaining prudent. In the majority of European countries, hotel rates post moderate rises, since though the increase in occupancy rates observes in September demonstrate an improvement in the situation, many factors of uncertainty still weigh upon the world tourism industry, notably the inflation tension on the oil market, a market that the airline companies watch closely, and through them, all other tourism professionals.This moderation of rate strategies is still anticipated for this year. The price for a single room rose by 1.6% over the year to reach an average of 101.6 Euros.This increase firstly shows the prudence of upscale hoteliers, for whom rates fell for the second consecutive year: -1.9% this year versus -2.2% in 2003, while the segment saw considerable gains in the past: +12.4% in 2000, +8.2% in 2001, and +8.4% in 2002. Upscale hotels, notably those in Paris or on the French Riviera depend on international customers. The anticipated return of high-buying...