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European business travel booms

The hotel industry has made one of the sharpest post-recession recoveries in the history of the industry, according to a senior boss at InterContinental Hotels Group (IHG).

Kirk Kinsell, Europe, Middle East and Africa president for IHG, says that the hospitality industry has seen an improvement like no other in the last two years. He said:

"For the first time, the demand for rooms across the world over the past year exceeded demand before the recession. It really was the sharpest recovery in the history of the industry."

The group, whose chain of hotels includes the Intercontinental, Crowne Plaza and Holiday Inn, confirm the claims through staggering financial results.

IHG reported full-year profits of £247.8m in 2010, marking a huge turnaround from the previous year's loss of £39.9m.

After a severe drop in business travel in the first half of 2009, which saw 2009 revenue per available room fell by 11% in the UK, and by as much as 40% in some parts of Europe, the situation improved by the end of the year and people started to travel again.

Upward trajectory

But towards the end of 2009, things began to improve. While Europe was still experiencing hard economic times, people began to travel again.

Research from American Express Business Insights - the research arm of the credit card provider - suggests that spending in hotels in Europe grew by 7% in 2010, with a further 4% growth in the first quarter of 2011.

The group found that while spending is not quite back to pre-downturn (2007) levels, it is back to where it was at the end of 2008 - and appears to be on an upward trajectory.

The return of the business traveller

Business travellers that have been a key driver of growth and are vital to the hospitality sector, making up a third of all travellers in Europe.

"Leisure travel was up in 2010 compared to previous years," says IHG's Kirk Kinsell. "This trend is continuing in 2011, but is also supported by the return of the business traveller."

American Express Business Insights confirms that business travel grew by 10% across Europe in 2010.

Asian flavour

It's not just hotels in Europe that are seeing a rebound in business.

Kirk Kinsell highlights the importance of emerging markets, and getting your brand known in Asia, particularly in China, as it will be travellers from this part of the world that will be increasing in number.

"The importance of having a presence in Asia will only increase," he says.

"Today there are 20 million outbound trips from China every year. By 2015, that will increase to 100 million. This alone will grow the outbound international travel market by 25%.

"We expect demand for hotel rooms from Chinese travellers to overtake demand from the US by 2025."

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