Daily Podcast: Europe's Hotel Room Prices Continue to Rise

Skift Daily Briefing Podcast

Listen to the day’s top travel stories in under four minutes every weekday.

Today’s edition of Skift’s daily podcast explains where the travel industry is recovering, why European hotels are more expensive despite lower occupancy, and where study abroad students are going instead of Russia.

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Episode Notes

Skift Research’s newly released Skift Travel Health Index for February 2022 reveals the travel industry made enormous progress in its recovery, with improved performances across all sectors and most countries. However, the war in Ukraine poses a significant threat to the industry’s rebound, reports Senior Research Analyst Wouter Geerts.

The latest Skift Travel Health Index data revealed a 9 percentage point increase in travel performance between January and February 2022, which was the biggest month-over-month improvement since March 2021. However, Geerts writes the index does not feature the full impact of the war due to Russia’s invasion starting on February 24. Russia was only one of two countries to show a decline in travel performance for February.

But Geerts acknowledges it’s unlikely that the Skift Travel Health Index for March will continue to show an improvement in travel performance. Although one travel executive said Western European destinations haven’t been severely affected by the war yet, much of Europe reported a decrease in flight tickets issued in the week after Russia launched its invasion. In addition, with oil prices surging due to the war, airfares are becoming more expensive as several carriers have added fuel surcharges to their prices.

Next, hotels in Europe are still struggling to hit pre-Covid metrics as the continent’s average occupancy rate is roughly 50 percent below 2019 levels. However, Corporate Travel Editor Matthew Parsons reports that European hotels are still charging more than they were prior to the pandemic.

Room rates in Europe are, on average, $31 more expensive than they were in February 2019, according to auditing and booking platform Tripbam. The rise in European hotel rates stands in stark contrast to the Asia-Pacific region, where room rates are $51 lower on average than they were prior to the start of the pandemic.

What’s driving the higher rates in Europe? One hotel executive attributed the surge in room rates to the recovery of corporate travel. Business travelers back on the road are, while reducing the number of trips they make, opting to stay longer in higher-end hotels, helping drive up room rates.

Finally, the war in Ukraine forced many study abroad providers to suspend their Russia programs and recall students they had in the world’s largest country. However, those organizations are developing alternatives to studying in Russia as well as making plans for their return, reports Editorial Assistant Rashaad Jorden.

Several study abroad providers have turned to locations outside of the country to finish their Russia programs, including Eastern Europe and Central Asia. Meanwhile, one organization not running any programs in Russia when the war started is considering taking students to other Russian-speaking areas in the future. Dana Thompson, the Russia program manager of Seattle-based One World Now, cited the Republic of Georgia and Kyrgyzstan as possible destinations for its Russia programs.

But while study abroad providers vow to return to Russia, when will they feel comfortable doing so? Several executives were noncommittal about issuing a timeframe while Thompson said that One World Now would take students back to Russia when it felt like students were safe from the war and any large-scale anti-American sentiment.