The Andersen Hotel Industry Benchmark Survey, which monitors the performance of over 3,000 hotels, has revealed that for the year to June, overall demand fell by 1.1%, reflecting the current economic climate and curtailment of some travel, particularly from the US. However, average room rates grew by 4.7%, well above the eurozone inflation.

There was a marked variance in the performance of capital and secondary cities while southern markets generally outperformed their northern counterparts. Paris, Rome, Milan and Barcelona all recorded double digit growth whilst London and Amsterdam both suffered below average growth. London hoteliers are generally finding trading conditions difficult during 2001.

With nearly 50% of demand generated by visitors from abroad, the decline has hit the capital hard, particularly as last year was hugely successful in terms of visitor numbers. However, even with the tail-off in demand, room rates have increased by 2.8% to £111 per night.