Higher operating costs could erode profitability

Hotel managers in Europe are likely to be more preoccupied by expenses in 2023

Jan 17, 2023

The rising costs of operating a hotel are likely to erode profitability in the United Kingdom and the rest of Europe, and could also cause potential buyers and investors in the hotel sector to think twice.

Key takeaways

  • Wage inflation is rampant, with wage costs sufficiently more than can be read officially anywhere;
  • Electricity costs are two to three times higher than they were last year;
  • Revenue per available room at London hotels will grow, but by no more than 15%, due in part to a weak pound.

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