Capturing travel demand: Hotel pricing and promotional strategies in Europe


Across Europe, forward-looking data paints a positive picture.

 Demand levels are higher than they have been since before the pandemic, and the travel outlook is optimistic. Despite uncertainty around the ongoing war in Ukraine, and the economic pinch leading to rising costs of living and increasing inflation, travelers are desperate to make up for lost time, with travel on the rise in and around Europe.

As popular travel destinations in Europe emerge from months of uncertainty and cancellations, trends in the travel industry are beginning to emerge. In this post we use Lighthouse’s Market Insight tool to look into demand trends and the Rate Insight tool to examine the evolution of the rate strategies of destinations across Europe, to see how hoteliers are capturing increasing demand in 2022.

Southern Europe travel rebounds

In Southern Europe, non-refundable rates are coming back into play. Prior to the pandemic, non-refundable rates were a hotel's bread and butter - a cheaper price point, and with most travelers unlikely to cancel, there was very little risk attached. 

In Barcelona 83% of hotels were offering non-refundable rates prior to the pandemic, down to 32% a year later in March 2021. And, since the backend of 2021, the percentage of hotels offering non-refundable rates in Barcelona is climbing - 54% of hotels in May 2022. 

The same can be seen in other popular destinations across Southern Europe, including Rome (89% pre-Covid, and now back up to 57%, Venice (95% pre-Covid, and now back up to 66%), Lisbon (85% pre-Covid, and now back up to 61%) and Athens (92% pre-Covid, and now back up to 71%). 

While the strategy from hoteliers has clearly been to encourage confidence during times of uncertainty, they have evolved. Despite new variants, the outbreak of war in Ukraine, and lingering volatility in the market, more and more hotels in Southern Europe are offering non-refundable rates. And, while more hotels offered semi-flex policies than before the pandemic, the percentage of hotels offering this in 2022 has also declined. 

However, following sudden downturns, such as the arrival of Omicron and the outbreak of war in Ukraine, short-term increases in the percentage of hotels with semi-flex policies can be identified. As soon as market uncertainty rears its head, hotels are keeping this tactic in play. 

Non-refundable and semi-flex rate evolution, Rome

Nonref and Semiflex evolution - Rome

Hotel discounting strategies evolve

Mobile discounts are also prominent in the Southern European market - popular destinations in Greece, and Portugal have been using them as part of their blend of rate strategies through the pandemic. In Athens, 30% of hotels are offering between 5 and 10%, and 8% of hotels are offering a discount of more than 10%. In Lisbon, 31% of hotels are offering a discount of between 5 and 10%. In Santorini, 46% of hotels were offering a mobile discount of between 5 and 10% in January, but this has reduced to just 26% of hotels offering this discount in May - a clear indication that demand and conversions have picked up as the year has progressed.Length of stay (LOS) discounts have fallen away too in many of these popular destinations, as summer approaches and hotels look to ensure they are converting at the best possible price.

LOS3 Discounts in January 2022

LOS 3 discounts January 2022

 With demand as much as 4.3 times higher (Rome) than the same period last year, hotels have been able to ensure they are maximizing their profits in line with this. In Rome, average room prices ten days before travel are 42.4% higher than they were in May of 2019, pre-pandemic, and 51% higher than they were in May 2021. In Barcelona, where hotel searches indicate demand 4.15 times higher than the same period last year, prices are 114% higher than they were in May 2021, and 24% higher than in May 2019. By contrast, in Santorini, where forward looking hotel search data indicates demand has comparatively slight gains to what it was in May 2021, we can see that prices are still 26% below 2019 levels.

LOS3 Discounts in May 2022

LOS 3 discounts May 2022

Travel demand picks up in France, Benelux & DACH

Forward looking demand data indicates that a high volume of consumers are exploring options of travel to cities in and around Western Europe. Demand has increased significantly compared to the same time last year. For Berlin, as many as 6.6 times more hotel searches were recorded than in May 2021. 

Business travel looks to be picking up too, with business hubs such as Brussels and Geneva seeing 12 times as much Global Distribution System (GDS) search traffic compared to May 2021. As hotels in these cities look to capitalize on increasing demand, we can see that non-refundable options are coming back into the mix. 

This option signifies growing consumer confidence and a return to short and mid-term market stability, as more and more European countries opt for an open door policy by removing travel restrictions. In Brussels, where 46% of hotels were offering a non-refundable rate in May 2021, 72% are offering non-refundable rates in May 2022. In Paris, 70% of hotels have a non-refundable rate, up from 41% in May 2021. 

GDS pickup since May 2021

GDS Hotel Search Evolution Index

In contrast, the percentage of hotels offering a semi-flex option has dipped back to what it was pre-pandemic. In Amsterdam, just 9% of properties have a semi-flex option, down from 22% in May 2021. 

For much of 2021, 22% of hotels offered a semi-flex option, spiking up to 42% when the Omicron variant resulted in a hard lockdown in November 2021. But, following the easing of those restrictions, we have seen that from March 2022, the semi-flex option has become far less prevalent. 

A similar trend can be seen in Germany, Switzerland, Belgium and Austria. In Geneva, 44% of hotels had a semi-flex option in February 2022; 11% just 3 months later. France is the exception. In Paris, 35% of hotels are still offering semi-flex rates, and in Bordeaux 40% - a figure that has remained consistent since this option came into prominence in 2020. 

Non-refundable and semi-flex rate evolution, Paris

Paris nonref and semiflex evolution

As demand increases, hoteliers are less likely to offer incentives, including LOS discounts, if they are able to fill their inventory at a better price. In Amsterdam, 38% of hotels were offering a LOS3 discount in January; in May, just 11% were offering this. 

In Paris, we have seen the same discount drop from being part of the rate strategy at 35% of hotels in January, to less than 5% in May. 

While some discounts are falling away, mobile discounts in some of the bigger cities in Europe have remained a consistent feature in the rate strategies of hotels. With many properties competing for OTA visibility and looking to capitalize on consumers’ pent up travel demand, the mobile booking discount incentivises consumers to book as soon as they see the promotion, rather than waiting to book later on a desktop. 

Booking convenience is key, and while international travel from America and Asia is yet to make a comeback, the source markets for all of these destinations remain overwhelmingly European - who are ready and eager to travel this summer.

Mobile discounts use in May 2022

Mobile discounts May 2022

With summer fast approaching, prices are beginning to reflect a busy vacation period. The first few months of 2022 have shown that prices were slightly below 2019 levels, but as demand has picked up, we are starting to see prices reflect that. 

In April, Munich was 38% below what it was in 2019. In May, Munich is pricing 7% higher than in 2019. Parisienne hotels are 31% more expensive in May than they were in May 2019. Geneva, Zurich and Brussels are still priced slightly below what they were in 2019. 

Pricing data, however, shows that prices are trending upwards, and despite lower demand in 2021, prices in 2022 are significantly higher than they were a year ago. The average price of a hotel in Amsterdam, this May, is 109% higher than it was in May 2021, 80% higher in Berlin, and 67% higher in Paris. Geneva is 60% higher than May last year, while Brussels is 30% higher and Zurich 23%.

 Pricing comparison 2022 v 2019

Destinations pricing comparison v 2019


Seeing demand is one thing, especially if the forward looking indicators are painting a rosy picture for most of Europe this summer. As hotels look to ensure they are converting this demand with innovative marketing strategies, it is also important that they are selling their rooms at the right price.

To do this, you need to be nimble enough to adjust your strategies when the indicators point to new opportunities. Rate Insight combined with Market Insight, is the perfect tech stack for any hotelier wanting to visualize new revenue opportunities and benchmark their strategy against their competitors.

As Europe prepares itself for a summer of travel, hotels have the perfect opportunity to see positive results at a time when they need it the most.

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