Report Overview

This report, a market size of the European accommodation sector, continues Skift Research’s effort to size the global travel industry. It builds upon our earlier U.S.accommodation sector market estimates by crossing the pond to Europe. This report covers businesses operating in the accommodation sector within all 44 countries in Europe

Skift Research estimates that the accommodation sector in Europe generated revenues of €238 billion in 2019. As a result of the pandemic, we estimate that the European accommodation sector suffered 45% year-over-year revenue decline in 2020 to €130 billion. The sector grew 14.5% to €149 billion in sales in 2021 and we expect it to grow another 15.6% to reach €172 billion in 2022, still 28% less than 2019 revenues. 

The fastest growing segment within that market has been short-term rental accommodations. Short-term rentals represented 10% of the overall industry in 2008, 12% in 2017, and, due to its above-market growth rate, we expect it to reach the 17% mark in 2021. This report includes an analysis of, and estimates for, key hospitality performance indicators such as revenue per available room, average daily rate, and occupancy rate for the entire market, subsectors, and individual countries.

What You'll Learn From This Report

  • Europe accommodation sector market size estimates, 2008–2022E
  • Europe hotels key performance indicators, 2008–2019
  • Europe short-term rentals key performance indicators, 2008–2019
  • Europe hotels market shares of 28 key countries, 2019
  • Europe hotels key performance indicators for 28 key countries, 2019
  • Breakdown of Europe total accommodation by business size, including number of companies, properties, rooms, employees, and revenue

Executive Summary 

Europe has maintained the position of a global leader in tourism in the past. Even with the adverse impact of the pandemic on the tourism industry, in 2021, Europe recorded the strongest results by region relative to 2020 with international arrivals up 19% indicating the resilience of its tourism sector. 

Skift Research estimates that the accommodation sector in Europe generated revenues of €238 billion in 2019. As a result of the pandemic, we estimate that the European accommodation sector suffered 45% year-over-year revenue decline in 2020 to €130 billion. The sector grew 14.5% to €149 billion in sales in 2021 and we expect it to grow another 15.6% to reach €172 billion in 2022, still 28% less than 2019 revenues. 

The fastest growing segment of accommodations in Europe has been short-term rentals. The sector grew ~2 times faster than hotels till 2019. The sector was also less severely impacted by the pandemic. Data shows that, while revenue for hotels decreased by 50%, revenue for short-term rentals decreased by 33% in 2020. 

In 2019, the last year for which we have historical data, there were 219 thousand hotel establishments in Europe which works out to 1.3 properties per company, on average while the average enterprise operating within the formal short-term rental accommodations sector had 2.5 properties in 2019. 

Between 2008 and 2019, RevPAR of hotels in Europe increased at a CAGR of 2.5%. The strongest growth came between 2014 and 2018, where RevPAR increased at an average rate of 6% year-over-year. RevPAR decelerated somewhat and returned to a more normalized 2.5% growth rate for 2019 before decelerating again in 2020 owing to the pandemic. Although RevPAR in 2021 improved slightly, full recovery is not expected until 2024. 

The trend in growth rates of revenue per available bed demonstrates the rise of short-term rental accommodations. Hotels witnessed an average growth rate of 2% while RevPAB for short-term rentals increased at around 4% between 2008 and 2018. 

The five largest geographical markets for hotels in Europe are, in order (based on 2019 revenue data – the last year for which data is available): Germany, Spain, the United Kingdom, Italy, and France. Collectively these five nations represented €120 billion in sales. The revenue from these five countries fell down to €62 billion in 2020. We estimate that these markets are set to generate €66 billion in sales in 2021, and €70 billion by 2022. 

Europe Accommodation Sector Market Size

Europe has upheld the position of a global leader in tourism in the past, with its international arrivals accounting for 40% of global international arrivals in 2019. As a result of the pandemic, international tourism arrivals in Europe dropped by 70% in 2020 in comparison to 2019. In 2021, Europe recorded the strongest results by region relative to 2020 with arrivals up 19%, though they remained 62% below 2019 levels.

The hospitality sector is amongst the largest and most relevant contributors of revenue and employment for both the European tourism sector and the overall European economy. 

As we mentioned in our recently published “U.S. Accommodation Sector Market Estimates 2022” report, the pandemic has affected hotels and short-term rentals, the two major sub-sectors of the accommodation industry, differently. While hotels were significantly hit, short-term rentals generally performed better. As with what’s happening elsewhere in the world, the next few years will be very crucial in shaping the state of the accommodation sector in the region with respect to the pace of recovery of different sub-sectors and general market dynamics. 

Revenue and Forecasts

Skift Research estimates that the accommodation sector in Europe generated revenues of €238 billion in 2019, a 4.4% compound annual growth rate (CAGR) since 2008, the earliest year in our analysis. As a result of the pandemic, we estimate that the European accommodation sector suffered 45% year-over-year revenue decline in 2020 to €130 billion. The sector grew 14.5% to €149 billion in sales in 2021 and we expect it to grow another 15.6% to reach €172 billion in 2022, still 28% less than 2019 revenues. 

Europe accommodation sector market size estimates, 2008–2022E

Revenue – Millions of €20082009201020112012201320142015201620172018201920202021E2022E
Accommodations€ 148,578€ 140,299€ 147,430€ 154,705€ 162,073€ 162,388€ 175,761€ 190,295€ 197,282€ 210,122€ 225,536€ 237,767€ 129,749€ 148,549€ 171,731
Hotels€ 126,193€ 119,131€ 124,179€ 129,424€ 135,825€ 136,363€ 147,639€ 158,355€ 164,125€ 173,237€ 185,971€ 193,866€ 97,637€ 110,623€ 125,940
Short-Term Rentals€ 14,295€ 13,507€ 14,935€ 16,318€ 16,531€ 16,828€ 18,102€ 21,286€ 22,481€ 25,646€ 28,502€ 31,757€ 21,362€ 25,654€ 31,599
Camping grounds, recreational vehicle parks and trailer parks€ 8,090€ 7,661€ 8,316€ 8,962€ 9,717€ 9,197€ 10,020€ 10,654€ 10,676€ 11,240€ 11,062€ 12,145€ 10,750€ 12,273€ 14,192

Source: Skift Research, Eurostat, IMF; historicals from Eurostat 2008-2020, Skift estimates 2021-2022 and estimates for short-term rentals sharing economy 2011-2022, Forecast as of April 2022

As we highlighted in our European Union Accommodation Sector 2019 report, the accommodation industry shrunk significantly in 2009 during the global financial crisis

and struggled once more in 2013 due to the Europe-specific recession caused by the

sovereign debt crisis. The sector bounced back in 2014 (8.2% growth rate), and was growing in a balanced manner until Covid-19 hit in 2020. 

The pandemic distorted the longer-term growth rate massively. We expect the CAGR to decrease to 1% between 2008 and 2022, from a CAGR of 4.4% between 2008 and 2019. 

The fastest growing segment of accommodations in Europe has been short-term rentals. The sector grew ~2 times faster than hotels till 2019. Unlike in the U.S., the pandemic did not boost the growth rate for short-term rentals. However, data shows that, while revenue for hotels decreased by 50%, revenue for short-term rentals decreased by 33% in 2020. 

Europe accommodation sector market growth rates, 2009–2022E

Revenue – Percent Change2009201020112012201320142015201620172018201920202021E2022ECAGR 2008-22E
Accommodations-5.6%5.1%4.9%4.8%0.2%8.2%8.3%3.7%6.5%7.3%5.4%-45.4%14.5%15.6%1.04%
Hotels-5.6%4.2%4.2%4.9%0.4%8.3%7.3%3.6%5.6%7.4%4.2%-49.6%13.3%13.8%-0.01%
Short-Term Rentals-5.5%10.6%9.3%1.3%1.8%7.6%17.6%5.6%14.1%11.1%11.4%-32.7%20.1%23.2%5.83%
Camping grounds, recreational vehicle parks and trailer parks-5.3%8.5%7.8%8.4%-5.3%8.9%6.3%0.2%5.3%-1.6%9.8%-11.5%14.2%15.6%4.10%

Source: Skift Research, Eurostat, IMF; historicals from Eurostat 2008-2020, Skift estimates 2021-2022 and estimates for short-term rentals sharing economy 2011-2022, Forecast as of April 2022

Skift Research’s Travel Health Index confirmed this discrepancy in the pace of recovery of hotels and short-term rentals as presented in the chart below. 

Short-term rentals represented 10% of the overall industry in 2008, 12% in 2017, and, due to its above-market growth rate, we expect it to reach the 17% mark in 2021. 

Most short-term rental accommodations in Europe are incorporated businesses that operate apartments, bungalows, chalets, cottages, cabins, and youth hostels. Also included in our market estimate is the sharing economy — rooms or apartments let out by individuals who oftentimes share the space with their guests. Because these are not formally registered enterprises, they are often overlooked by government business statistics. 

We estimate that the sharing economy in accommodations grossed €2.8 billion in sales in 2019. That means it made up 10% of the market for short-term rental accommodations and 1% of the overall accommodation market in Europe. However, as a result of the pandemic and guests refraining from sharing spaces with rental hosts, we expect the share of the sharing economy to fall to 7% of the total short-term rental accommodation market in 2022 with revenues falling to  €1.9 billion. (See our methodological footnotes at the end of this report for more details)

Also worth noting is camping grounds, recreational vehicle parks, and trailer parks which control a small, but meaningful, niche in the market. These accommodation options held typically between 5 and 6% of the overall market until 2019. However, the spread of Covid-19 made air travel and other public transportation unpopular options, while personal vehicles felt more of a safe haven. As a result, travelers actively started opting for recreational vehicle-related activities, culminating in a market share increase of camping grounds, recreational vehicle parks and trailer parks. The share increased to 8% of the overall market in 2020 and is expected to be the same in 2022. 

Europe accommodation subsector market share, 2008–2022E

As a Share of Industry Revenue20082009201020112012201320142015201620172018201920202021E2022E
Hotels85%85%84%84%84%84%84%83%83%82%82%82%75%74%73%
Short-Term Rentals10%10%10%11%10%10%10%11%11%12%13%13%16%17%18%
Camping grounds, recreational vehicle parks and trailer parks5%5%6%6%6%6%6%6%5%5%5%5%8%8%8%

Source: Skift Research, Eurostat, IMF; historicals from Eurostat 2008-2020, Skift estimates 2021-2022 and estimates for short-term rentals sharing economy 2011-2022, Forecast as of April 2022

Size and Scale of Companies

In 2019, the last year for which Eurostat data was available, there were just over 395

thousand businesses offering accommodation to travelers in Europe. 169

thousand of them were hotels while 207 thousand of businesses were offering short-term rental accommodations. 

This excludes the informal businesses that make up the sharing economy. It reflects an astonishing rate of new business formation in the short-term rentals subsector. In 2008, there were only 88 thousand businesses operating short-term rentals which increased to 207 thousand in 2019, which means that businesses operating short-term rentals more than doubled within a decade. 

2017 marked a turning point when the number of businesses offering short-term rental accommodations surpassed the number of hotels. Short-term rental businesses have been added at a net new rate of 8% per year since 2008; for hotels that figure is 0.3%.

A minority of businesses run campgrounds or RV/trailer parks, and their net business formation rate has been slightly more than hotels.

Europe accommodation enterprise count, 2008–2019

Enterprises – Number200820092010201120122013201420152016201720182019
Accommodations269,021276,522278,649284,684291,264296,770315,956334,890351,744361,311379,894395,920
Hotels163,798164,393162,009161,533163,528163,737165,388168,011168,145166,613167,611169,913
Short-Term Rentals (ex-Sharing)88,38194,90699,407105,448109,815115,595133,345149,043165,770176,689193,888207,436
Camping grounds, recreational vehicle parks and trailer parks16,84317,22317,23317,70217,92117,43817,22417,83617,82818,00918,39618,572

Source: Eurostat, Data retrieved as of April 2022

Europe accommodation net enterprise growth rates, 2008–2019

Enterprises – Percent Change 20092010201120122013201420152016201720182019CAGR 2008-22E
Accommodations2.8%0.8%2.2%2.3%1.9%6.5%6.0%5.0%2.7%5.1%4.2%2.8%
Hotels0.4%-1.5%-0.3%1.2%0.1%1.0%1.6%0.1%-0.9%0.6%1.4%0.3%
Short-Term Rentals (ex-Sharing)7.4%4.7%6.1%4.1%5.3%15.4%11.8%11.2%6.6%9.7%7.0%6.3%
Camping grounds, recreational vehicle parks and trailer parks2.3%0.1%2.7%1.2%-2.7%-1.2%3.6%0.0%1.0%2.1%1.0%0.7%

Source: Eurostat, Data retrieved as of April 2022

In 2019, the last year for which we have historical data, there were 219 thousand hotel establishments in Europe. This works out to 1.3 properties per company, on average. Properties per company have remained more or less constant since 2008. 

The average enterprise operating within the formal short-term rental accommodations sector had 2.5 properties in 2019. This is because there are major differences between short-term rentals and hotels in terms of products and cost structures. Generally, the upfront capital investment required to buy a short-term rental is significantly lower than to develop a multi-unit hotel. 

Europe accommodation establishment count, 2008–2019

Establishments – Number200820092010201120122013201420152016201720182019
Accommodations498,904518,992527,794521,211601,403610,936618,080640,649662,603715,065741,256764,904
Hotels217,897220,534221,754220,637219,721220,343218,435220,784219,630218,904218,685219,391
Short-Term Rentals (ex-Sharing)252,441268,955276,486271,163352,191359,852368,352388,239412,117464,779491,866513,941
Camping grounds, recreational vehicle parks and trailer parks28,56629,50329,55329,41029,49230,74131,29331,62730,85631,38230,70531,571

Source: Eurostat, Data retrieved as of April 2022

Europe accommodation establishments per enterprise, 2008–2019

Establishments per Enterprise200820092010201120122013201420152016201720182019
Accommodations1.91.91.91.82.12.12.01.91.92.02.01.9
Hotels (ex-Sharing)1.31.31.41.41.31.31.31.31.31.31.31.3
Short-Term Rentals2.92.82.82.63.23.12.82.62.52.62.52.5

Source: Eurostat, Data retrieved as of April 2022

Key Performance Indicators

Hotel Revenue Per Available Room

Revenue per available room (RevPAR) is a strategic metric for any hotel because it identifies the hotel’s ability to manage both occupancy (rooms sold) and the average daily room rate, so as to maximize room revenues.

Average daily rates (ADR) can give a good sense of pricing power but obscures the volume of rooms sold. What good is charging $800 a night if you only sell a single room at that rate? Occupancy measures demand for a property but says little about whether the management is charging a fair price. RevPAR is powerful because it is a measure of unit revenue that combines a property’s pricing power with its utilization to give a sense of how an accommodation is performing in the marketplace and vs. peers.

In addition, RevPAR can also help the operator in cutting down costs. With RevPAR, the hotel establishes a clear baseline for its daily revenue, for which their total expenditure cannot increase. For example, if the total daily costs for a hotel divided by the total number of hotel rooms exceeds RevPAR, the hotel is losing money even when its rooms are fully booked. As such, comparing RevPAR with daily costs can help hotels identify an optimal booking price point or boost occupancy to always avoid bookings at loss.

Between 2008 and 2019, RevPAR of hotels in Europe increased at a CAGR of 2.5%. The strongest growth came between 2014 and 2018, where RevPAR increased at an average rate of 6% year-over-year. RevPAR decelerated somewhat and returned to a more normalized 2.5% growth rate for 2019.

Europe Hotels revenue per available room and % change, 2008–2019

Revenue per Available Room200820092010201120122013201420152016201720182019
Hotels€ 53.4€ 49.3€ 50.4€ 52.0€ 53.7€ 52.2€ 56.5€ 59.9€ 62.1€ 64.4€ 68.2€ 69.9
RevPAR, % Change-8%2%3%3%-3%8%6%4%4%6%2%

Source: Skift Research, IMF, Eurostat, Data retrieved as of April 2022

We can examine what is driving RevPAR growth (or decline) by decomposing the metric into its two component parts: average daily rate (ADR) and occupancy. Between 2008 and 2017, in aggregate, RevPAR growth was split evenly between ADR and occupancy. 

If we look at the years individually, in 2018 and 2019, pricing power was the biggest driver of RevPAR gains, as was the case in 2014 and 2015.

According to STR, RevPAR in Europe decreased by 62.5% in 2020 and by 44.2% in 2021 as compared to 2019. Industry experts believe that full recovery is not expected until 2024

Unsurprisingly, the big dip in RevPAR in 2020 was driven by a huge decrease in occupancy rates. Occupancy rate in 2020 fell by 54.2 percentage points while ADR fell by 18.2%. The same trend followed in 2021 with occupancy rates 40 percentage points lower than 2019, while ADR was 6.9% less than 2019 levels. 

Hotel Occupancy and Pricing

Examining the occupancy rates for hotels in Europe over the past few years, we see that the largest increases in occupancy have come over the most recent few years. Occupancy was previously trending in the low 70% range, with a notable decline in 2009. Starting in 2015 and continuing through 2019, hotel occupancy began to climb, settling at an 80% rate. 

Europe Hotels occupancy rate and percentage point change, 2008–2019

Hotels200820092010201120122013201420152016201720182019
Occupancy rate %72%68%69%71%72%71%72%74%77%79%80%80%
Occupancy, Ppt Change-4%1%2%0%-1%1%2%3%2%1%0%

Source: Skift Research, IMF, Eurostat, Data retrieved as of April 2022

The chart below shows the changes in occupancy levels from 2019 to 2021 at a monthly level. 

Between 2008 and 2013, ADRs hovered in the range of €70 to €75. From 2014 to 2019, ADRs consistently increased at an average of 3% year-over-year. 2019 saw the strongest ADR environment since 2008, according to our analysis.

Europe Hotels average daily rate and % change, 2008–2019

Hotels200820092010201120122013201420152016201720182019
Average Daily Rate€ 73.7€ 72.3€ 73.0€ 72.8€ 75.0€ 73.6€ 78.1€ 80.7€ 80.3€ 81.7€ 85.1€ 87.1
ADR, % Change-2.0%1.0%-0.2%3.1%-1.9%6.1%3.3%-0.4%1.7%4.1%2.4%

Source: Skift Research, IMF, Eurostat, Data retrieved as of April 2022

All Accommodations – Revenue per Available Bed

The standard hotel room in Europe, and across the world, sleeps two (double bed or queen bed). But this is not the case for short-term rental accommodations. Hostels, with their shared bunks, can sleep 4 to 8 or more in a single room and a chalet vacation rental fits a full family or two. To adjust for these disparities, across and within accommodation subsectors, we can measure revenue per available bed (RevPAB). Below, we present revenue per available bed for the entire Europe accommodation sector and for its three main subsectors. We have restated the hotels data on this per-bed basis rather than on a per-room basis to allow for comparability (the average Europe hotel has 2.1 beds per bedrooms). 

Looking across sectors, we quickly see the scale advantage that hotels have over short-term rental accommodations on a unit revenue basis. Hotels earn around four times as much per bed as short-term rental accommodation. This is both a function of hotels being able to charge higher rates and driving higher year-round occupancy rates. The spread is even wider compared to campgrounds and RV/trailer parks.

Europe accommodation sector revenue per available bed, 2008–2019

Revenue per Available Bed200820092010201120122013201420152016201720182019
Accommodations€ 13.4€ 12.2€ 13.1€ 13.6€ 13.7€ 13.4€ 14.3€ 15.4€ 15.9€ 16.6€ 17.4€ 18.0
Hotels€ 26.5€ 24.3€ 24.9€ 25.6€ 26.2€ 25.3€ 27.4€ 29.0€ 30.0€ 30.9€ 32.6€ 33.3
Short-Term Rentals (ex-Sharing)€ 6.5€ 5.6€ 6.3€ 6.8€ 6.0€ 5.9€ 6.3€ 7.2€ 7.5€ 8.2€ 8.8€ 9.4
Camping grounds, recreational vehicle parks and trailer parks€ 1.9€ 1.8€ 2.1€ 2.3€ 2.5€ 2.3€ 2.5€ 2.7€ 2.7€ 2.8€ 2.8€ 3.0

Source: Eurostat, Data retrieved as of April 2022

However, the trend in growth rates of revenue per available bed demonstrates the rise of short-term rental accommodations. Hotels witnessed slower growth rates, on an average 2% between 2008 and 2018 while RevPAB for short-term rentals increased at around 4% over the same time period. Fastest still, is campgrounds which posted an average of 4.5% increase year-over-year. 

One explanation for this might be the rise of tech platforms and the general professionalization of the short-term rental space allowing operators to better utilize their assets and drive pricing power. With short-term rentals gaining market share as a result of the pandemic, the gap between RevPABs of hotels and short-term rentals is expected to get narrower. 

Europe accommodation sector revenue per available bed growth rates, 2009–2019

Revenue per Available Bed – Percent Change20092010201120122013201420152016201720182019
Accommodations-8.5%7.1%3.7%0.9%-2.6%7.4%7.1%3.2%4.4%5.3%3.5%
Hotels-8.4%2.2%2.8%2.5%-3.4%8.2%5.7%3.5%3.1%5.4%2.2%
Short-Term Rentals (ex-Sharing)-13.1%11.0%8.5%-11.8%-1.0%5.3%15.5%3.2%10.4%6.5%7.5%
Camping grounds, recreational vehicle parks and trailer parks-5.9%16.9%6.6%9.6%-6.7%8.2%6.2%0.7%4.7%-1.9%9.6%

Source: Eurostat, Data retrieved as of April 2022

Short-Term Rentals Occupancy and Pricing

Unlike hotels, if we split short-term rentals’ RevPAB into its component parts, it is clear that the growth of the subsector is driven by an increase in occupancy rates. 2015 witnessed a massive 31 percentage points increase in occupancy rate which was maintained until 2019. Room rates, on the other hand, remained more or less constant between 2008 and 2019. 

This indicates that before the pandemic hit, occupancy rates and hence the popularity of short-term rentals was increasing but businesses were unable to increase prices to drive the RevPAB even higher. 

Europe Short-Term Rentals occupancy rate and percentage point change, 2008–2019

Short-Term Rentals200820092010201120122013201420152016201720182019
Occupancy Rate, % (Bed Basis)24%21%21%21%22%21%22%29%29%28%29%30%
Occupancy, Ppt Change-11%-1%2%4%-4%2%31%1%-3%2%4%

Source: Skift Research, IMF, Eurostat, Data retrieved as of April 2022

Europe Short-Term Rentals average daily rate and % change, 2008–2019

Short-Term Rentals200820092010201120122013201420152016201720182019
Average Daily Rate (Bed Basis)€ 27.3€ 26.6€ 29.9€ 31.9€ 27.0€ 27.8€ 28.6€ 25.2€ 25.7€ 29.1€ 30.3€ 31.4
ADR, % Change-3%12%7%-15%3%3%-12%2%13%4%4%

Source: Skift Research, IMF, Eurostat, Data retrieved as of April 2022

Over the last two years, short-term rentals have become a preferred choice of accommodation. STR data on short-term rentals occupancy rates for 2020 and 2021 with respect to 2019 show that the sector bounced back quickly in 2020. This presents business owners in this sub-sector with an opportunity to increase room rates by leveraging healthy occupancy levels to push RevPAB even higher. 

All accommodations – Operating Margins

As we mentioned in our 2019 report, top-line metrics are critical to understanding the business dynamics of any industry, yet are still an incomplete picture. Revenue speaks well to the supply and demand environment but tells little of the costs associated with running a business in the accommodation industry. Operating income helps us understand this dynamic. It measures profit after personnel costs and other operating business expenses but excludes costs of financing or capital investment.

As of 2019, the accommodations sector in Europe generated €46 billion of operating income, 81% of which came from hotels. 

Europe accommodation sector operating income, 2008–2019

Operating Income – Millions of €200820092010201120122013201420152016201720182019
Accommodations26,97821,89821,47224,55425,49726,52833,04036,77238,95241,60444,19046,271
Hotels22,52317,56216,86719,45520,03421,21326,59629,66431,80834,14336,59437,306
Short-Term Rentals (ex-Sharing)2,4002,4452,6872,7763,0273,0603,6094,1544,4414,7114,9335,874
Camping grounds, recreational vehicle parks and trailer parks2,0561,8921,9172,3242,4362,2552,8352,9542,7022,7512,6633,090

Source: Eurostat, Data retrieved as of April 2022

However, operating margins for hotels are slightly lower than those of short-term rentals. This can be attributed to the structural differences between the two business models where the low-service business model of short-term rental accommodations reduces overhead expenses. For campgrounds, even more so.

Europe accommodation sector operating margin, 2008–2019

Operating Margin – % 200820092010201120122013201420152016201720182019
Accommodations18%16%15%16%16%16%19%19%20%20%20%19%
Hotels18%15%14%15%15%16%18%19%19%20%20%19%
Short-Term Rentals (ex-Sharing)17%18%18%17%18%18%20%20%20%18%17%18%
Camping grounds, recreational vehicle parks and trailer parks25%25%23%26%25%25%28%28%25%24%24%25%

Source: Eurostat, Data retrieved as of April 2022

Accommodation Market Share by Enterprise Size

We used European governmental data to break down the accommodation sector based on the different sizes of enterprises. The primary determinant of enterprise scale in Europe is the number of employees. Large businesses operate with 250 employees or more. Medium businesses run with 50–249 employees, small ones with 10–49 staff, and micro-enterprises with less than that. These three categories often get aggregated into the group “small and medium enterprises” (SMEs).

Hotels

In 2019 (the latest available year), around 99% of hotel owners in Europe were SMEs. These SMEs employ 75% of the staff with 12 employees per enterprise on average. On the other hand, a small slice of large hotels (945 hotels) employ 25% of the staff with 710 employees per enterprise. 

Europe Hotels operations breakdown by enterprise size, 2019

Hotels, 2019EnterprisesPersons EmployedShare of EnterprisesShare of EmploymentEmployees per Enterprise
SMEs168,9691,966,70199%75%12
Micro (<10)120,205361,50271%14%3
Small (10-49)40,858836,07124%32%20
Medium (50-249)7,906769,1285%29%97
Large (> 250)945670,6781%25%710
Total169,9142,637,380100%100%16

Source: SkiftResearch analysis of Eurostat data, Data retrieved as of April 2022

The scale advantage of large hotel enterprises is notable when examining revenue contribution. Those 945 businesses generated 30% of all hotel revenue in Europe in 2019. These operations generated €62 million per enterprise, on average, compared to €798 thousand for SMEs combined. Economies of scale also become clear looking at the sales per employee figures. Large hotels can generate ~€88 thousand in sales per employee, while SMEs earn ~€68 thousand per employee.

Europe Hotels revenue breakdown by enterprise size, 2019

Hotels, 2019Revenue (€M)Share of RevenueRevenue per EnterpriseRevenue per Employee
SMEs€ 134,91870%€ 798,477€ 68,601
Micro (<10)€ 24,93813%€ 207,464€ 68,985
Small (10-49)€ 53,78628%€ 1,316,417€ 64,332
Medium (50-249)€ 56,19429%€ 7,107,456€ 73,062
Large (> 250)€ 58,94830%€ 62,386,669€ 87,893
Total€ 193,866100%€ 1,140,966€ 73,507

Source: SkiftResearch analysis of Eurostat data, Data retrieved as of April 2022

Short-Term Rentals

In case of short-term rentals, almost all enterprises are SMEs. Within SMEs, 98% of the businesses are micro-enterprises, employing fewer than 10 individuals. With an average employee count of 1.5, this class of businesses is effectively run by sole proprietorships.

In terms of employment, large businesses account for 14% of employment in this space (compared with 25% for hotels) whereas micro enterprises are responsible for 61% of employment (compared with 14% for hotels).

Europe Short-Term Rentals operations breakdown by enterprise size, 2019

Short-Term Rentals, 2019EnterprisesPersons EmployedShare of EnterprisesShare of EmploymentEmployees per Enterprise
SMEs207,368414,218100%86%2
Micro (<10)202,372293,93698%61%1.5
Small (10-49)4,61684,7962%18%18
Medium (50-249)38135,4850.2%7%93
Large (> 250)7566,5120.04%14%892
Total207,443480,729100%100%2

Source: SkiftResearch analysis of Eurostat data, Data retrieved as of April 2022

When looking at revenue share of the short-term rental accommodations space, large enterprises retain a similar amount of relative control as do their hotel peers. Large providers of short-term rentals and hotels accounted for 30% of their respective sector revenue. The difference primarily lies in the distribution of revenue within SMEs, specifically the microenterprises. In short-term rentals, microenterprises generate 41% of revenue, small businesses generate 19% of revenue, and medium businesses generate 10% of the revenue while in hotels, microenterprises control 13% of revenue, small businesses control 28% revenue, and medium businesses control 29% of the revenue.  

Europe Short-Term Rentals revenue breakdown by enterprise size, 2019

Short-Term Rentals, 2019Revenue (€M)Share of RevenueRevenue per EnterpriseRevenue per Employee
SMEs€ 21,30670%€ 102,743€ 51,436
Micro (<10)€ 12,34741%€ 61,010€ 42,005
Small (10-49)€ 5,92419%€ 1,283,484€ 69,867
Medium (50-249)€ 3,03510%€ 7,970,835€ 85,514
Large (> 250)€ 9,15730%€ 122,774,596€ 137,677
Total€ 30,463100%€ 146,849€ 63,368

Source: SkiftResearch analysis of Eurostat data, Data retrieved as of April 2022

It is noteworthy that in hotels, all SMEs and large businesses report similar revenues per employee while in case of short-term rentals revenues per employee for large businesses is 3x that of revenues per employee for SMEs. As highlighted in our 2019 report, this implies that many of the efficiencies of scale provided to hotels come on the centralized marketing and distribution side. In contrast, for short-term rental accommodations, even small gains in size result in scale efficiencies. 

Sean O’Neill from Skift, recently reported that some of the biggest names in private equity firms, hedge funds, and alternative asset management are chasing investments in short-term rentals and vacation rentals as new assets to diversify their portfolios. With increasing investments in the sector, we can expect the share of large businesses to increase and with that an increase in overall vacation rental efficiency in the years to come. 

Camping grounds, recreational vehicle parks and trailer parks

In the case of campgrounds and RV parks, similar to short-term rentals, almost all enterprises are SMEs. Within SMEs, 88% of the businesses are micro-enterprises, employing fewer than 10 individuals. 

In terms of employment, large businesses account for 25% of employment in this space whereas micro enterprises are responsible for 30% of employment.

Europe Camping grounds, recreational vehicle parks and trailer parks operations breakdown by enterprise size, 2019

Camping grounds, recreational vehicle parks and trailer parks, 2019EnterprisesPersons EmployedShare of EnterprisesShare of EmploymentEmployees per Enterprise
SMEs18,63291,538100%75%5
Micro (<10)16,42936,02788%30%2
Small (10-49)1,99436,27411%30%18
Medium (50-249)20919,2371%16%92
Large (> 250)3230,2220%25%958
Total18,664121,760100%100%7

Source: SkiftResearch analysis of Eurostat data, Data retrieved as of April 2022

When looking at revenue share of the campground and RV parks sub-sector, large enterprises control a 28% share, similar to the other two sub-sectors while the share of revenue amongst SMEs is more or less evenly distributed unlike the other two sub-sectors. 

Europe Camping grounds, recreational vehicle parks and trailer parks revenue breakdown by enterprise size, 2019

Camping grounds, recreational vehicle parks and trailer parks, 2019Revenue (€M)Share of RevenueRevenue per EnterpriseRevenue per Employee
SMEs€ 8,42672%€ 452,232€ 92,051
Micro (<10)€ 3,41529%€ 207,860€ 94,790
Small (10-49)€ 3,16527%€ 1,587,311€ 87,254
Medium (50-249)€ 1,84616%€ 8,826,326€ 95,967
Large (> 250)€ 3,31928%€ 105,251,724€ 109,827
Total€ 11,745100%€ 629,308€ 96,463

Source: SkiftResearch analysis of Eurostat data, Data retrieved as of April 2022

Hotel Market Share by Country

In this section, we provide a breakdown of the market share by country on a revenue basis of hotels and forecast it out to 2022. The five largest geographical markets for hotels in Europe are, in order (based on 2019 revenue data – the last year for which data is available): Germany, Spain, the United Kingdom, Italy, and France. Collectively these five nations represented €120 billion in sales, 67% of the European market in 2019. The revenue from these five countries fell down to €62 billion in 2020 owing to Covid-19. We estimate that these markets are set to generate €66 billion in sales in 2021, and €70 billion by 2022. 

Germany is, by our estimates, the largest hotel market in Europe. We estimate

that it will generate €18 billion in sales in 2022, a 14% share. 

German Hotels market size, growth, and share, 2008–2022E

Hotels20082009201020112012201320142015201620172018201920202021E2022E
Revenue € 17,674€ 18,674€ 19,278€ 21,470€ 22,800€ 21,531€ 23,810€ 25,592€ 26,892€ 27,916€ 31,177€ 31,683€ 16,919€ 17,447€ 17,912
Growth 6%3%11%6%-6%11%7%5%4%12%2%-47%3%3%
Share within top 28 European Countries14.0%15.7%15.5%16.6%16.8%15.8%16.1%16.2%16.4%16.1%16.8%16.3%17.3%15.8%14.2%

Source: Skift Research, Eurostat, IMF; historicals from Eurostat 2008-2020, Skift estimates 2021-2022. Forecast as of April 2022

In 2022, the United Kingdom became the second largest hotel market in Europe with a market share of 12.5% and sales of around €16 billion. The growth rate of the sector in the United Kingdom has remained volatile since 2015 largely because of the run up to and consequences of Brexit. Brexit was followed by the pandemic which further destabilized the growth of the sector. 

British Hotels market size, growth, and share, 2008–2022E

Hotels20082009201020112012201320142015201620172018201920202021E2022E
Revenue € 16,989€ 15,291€ 15,734€ 16,384€ 18,594€ 18,444€ 22,034€ 24,204€ 22,195€ 21,912€ 21,496€ 24,161€ 12,513€ 14,288€ 15,757
Growth -10%3%4%13%-1%19%10%-8%-1%-2%12%-48%14%10%
Share within top 28 European Countries13.5%12.8%12.7%12.7%13.7%13.5%14.9%15.3%13.5%12.6%11.6%12.5%12.8%12.9%12.5%

Source: Skift Research, Eurostat, IMF; historicals from Eurostat 2008-2020, Skift estimates 2021-2022. Forecast as of April 2022

The hotel sector revenue in Italy has maintained a steady share of around 12% over the last decade. We expect the Italian hotel market revenue to grow at a slow pace to €15 billion in 2022. 

Italian Hotels market size, growth, and share, 2008–2022E

Hotels20082009201020112012201320142015201620172018201920202021E2022E
Revenue € 15,361€ 14,546€ 15,827€ 15,180€ 16,157€ 16,145€ 16,793€ 18,230€ 18,604€ 19,812€ 20,627€ 21,113€ 14,848€ 15,071€ 15,231
Growth -5%9%-4%6%0%4%9%2%6%4%2%-30%2%1%
Share within top 28 European Countries12.2%12.2%12.7%11.7%11.9%11.8%11.4%11.5%11.3%11.4%11.1%10.9%15.2%13.6%12.1%

Source: Skift Research, Eurostat, IMF; historicals from Eurostat 2008-2020, Skift estimates 2021-2022. Forecast as of April 2022

France used to be the smallest market for hotels of the big five in Europe until 2019. However, it was not as hard hit by the pandemic as the other four countries and has gained market share starting 2020. 

French Hotels market size, growth, and share, 2008–2022E

Hotels20082009201020112012201320142015201620172018201920202021E2022E
Revenue € 16,186€ 14,793€ 15,794€ 16,026€ 16,551€ 16,380€ 16,529€ 16,928€ 17,350€ 18,197€ 20,372€ 18,606€ 11,002€ 11,563€ 11,810
Growth -9%7%1%3%-1%1%2%2%5%12%-9%-41%5%2%
Share within top 28 European Countries12.8%12.4%12.7%12.4%12.2%12.0%11.2%10.7%10.6%10.5%11.0%9.6%11.3%10.5%9.4%

Source: Skift Research, Eurostat, IMF; historicals from Eurostat 2008-2020, Skift estimates 2021-2022. Forecast as of April 2022

Spain used to be the second largest hotel market in Europe until 2019. However, it was the most severely hit by the pandemic with hotel revenues down by 71% in 2020, due to its heavy reliance on inbound travel. 

Spanish Hotels market size, growth, and share, 2008–2022E

Hotels20082009201020112012201320142015201620172018201920202021E2022E
Revenue € 15,639€ 14,077€ 14,141€ 14,819€ 14,907€ 15,174€ 15,929€ 17,647€ 19,439€ 21,347€ 22,759€ 24,454€ 6,985€ 8,013€ 8,875
Growth -10%0%5%1%2%5%11%10%10%7%7%-71%15%11%
Share within top 28 European Countries12.4%11.8%11.4%11.4%11.0%11.1%10.8%11.1%11.8%12.3%12.2%12.6%7.2%7.2%7.0%

Source: Skift Research, Eurostat, IMF; historicals from Eurostat 2008-2020, Skift estimates 2021-2022. Forecast as of April 2022

While we do not have market forecasts for major countries in Europe, we

do have historical data for all of them. This allows us to show European market share by country for 2019, the latest year for which data is available. This includes market shares by not just revenue, but also by room nights, beds, and properties.

Europe major countries’ Hotels market shares, 2019

CountryRevenueRoom NightsBedsProperties
Germany 16%14%12%15%
Spain13%15%12%9%
United Kingdom12%9%15%18%
Italy11%13%14%15%
France10%10%8%8%
Austria5%4%4%5%
Greece3%5%5%5%
Netherlands3%2%2%2%
Sweden3%2%2%1%
Portugal2%3%2%1%
Ireland2%1%1%1%
Poland2%2%2%2%
Belgium1%1%1%1%
Denmark1%1%1%0%
Croatia1%1%1%0%
Czechia1%2%2%3%
Hungary1%1%1%1%
Romania1%1%1%1%
Finland1%1%1%0%
Cyprus1%1%1%0%
Bulgaria1%1%2%1%
Slovenia0%0%0%1%
Malta0%0%0%0%
Slovakia0%1%1%1%
Luxembourg0%0%0%0%
Estonia0%0%0%0%
Lithuania0%0%0%0%
Latvia0%0%0%0%

Source: SkiftResearch analysis of Eurostat data, Data retrieved as of April 2022

We have also been able to retrieve key hotel performance indicators for top European countries including RevPAR, ADR, and occupancy. We have estimated the

contribution of foreign visits to the overall occupancy rate. For example, taking the top European countries as a whole foreign visitors contributed 51% of the overall occupancy rate in 2019. 

Europe major countries’ Hotels performance indicators, 2019

Country RevPAR ADROccupancyForeigner Contribution to Occupancy
Belgium€ 110€ 11893%61%
Bulgaria€ 25€ 4654%68%
Czechia€ 38€ 4782%58%
Denmark€ 119€ 13191%43%
Germany€ 87€ 10385%24%
Estonia€ 49€ 5589%68%
Ireland€ 180€ 24673%86%
Greece€ 39€ 5670%85%
Spain€ 72€ 10171%92%
France€ 78€ 8592%35%
Croatia€ 71€ 8287%89%
Italy€ 53€ 7570%50%
Cyprus€ 80€ 11569%90%
Latvia€ 47€ 5388%76%
Lithuania€ 37€ 5173%60%
Luxembourg€ 125€ 20660%89%
Hungary€ 51€ 5594%52%
Malta€ 88€ 11775%90%
Netherlands€ 122€ 16972%83%
Austria€ 99€ 11090%73%
Poland€ 56€ 6783%28%
Portugal€ 78€ 9879%93%
Romania€ 33€ 5857%20%
Slovenia€ 66€ 7984%74%
Slovakia€ 30€ 4173%39%
Finland€ 59€ 6985%32%
Sweden€ 106€ 12684%25%
United Kingdom€ 65€ 12652%50%

Source: SkiftResearch analysis of Eurostat data, Data retrieved as of April 2022

Methodology and Definitions

​​In-Scope Countries and Currency

This report covers businesses operating in the accommodation sector within all 44 countries in Europe: Albania, Andorra, Armenia, Austria, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Moldova, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom

Eurostat reports data for the member states of the European Union. The number of member states reduced from 28 to 27 in 2020 when the United Kingdom formally exited the European Union. The 28 member states as of 2019 were: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom

Eurostat data for the United Kingdom is only available till 2019; and 2018 for a few metrics. We have forecasted the values for the missing years for better comparability. In addition, Croatia joined the European Union only in 2013. In cases where we present historical data, Croatia has been included retroactively for comparability.

Furthermore, to account for the remaining 16 countries (out of the total of 44 European countries), we have increased the overall figures of the 28 countries by a certain percentage. We arrived at this percentage based on the share of these 16 countries in the total inbound tourism expenditure. The values are below:

Inbound tourism expenditure in the country200820092010201120122013201420152016201720182019
Share of Non-EU countries7.4%7.8%8.3%8.5%8.8%8.7%8.6%8.9%8.7%8.7%8.6%8.7%

Source: UNWTO

All currency figures in this report are reported in euros and all other currencies have been converted to euros at annual average market exchange rates. At present there are 19 countries in the euro area that share this common currency, but the area has gone through multiple rounds of enlargements over the observation period of this report (there were 15 euro area members in 2008). As a result, accommodation revenue in certain nations, most notably the UK, will include the impact of currency fluctuations.

Sector Definitions

We split the accommodation market in Europe into three segments that conform to the NACE statistical classification of economic activities in the European community.

Hotels: This class includes the provision of accommodation, typically on a daily or weekly basis, principally for short stays by visitors. This includes the provision of furnished accommodation in guest rooms and suites. Services include daily cleaning and bed-making. A range of additional services may be provided such as food and beverage services, parking, laundry services, swimming pools and exercise rooms, recreational facilities as well as conference and convention facilities. This class includes accommodation provided by: hotels (and similar establishments, for instance operating under the name ‘bed & breakfast’); resort hotels; suite/apartment hotels; motels.

Holiday and short-stay accommodations: For the purpose of this report, we refer to this category as ‘Short-term rentals’. This class includes the provision of accommodation, typically on a daily or weekly basis, principally for short stays by visitors, in self-contained space consisting of complete furnished rooms or areas for living/dining and sleeping, with cooking facilities or fully equipped kitchens. This may take the form of apartments or flats in small free-standing multi-storey buildings or clusters of buildings, or single storey bungalows, chalets, cottages and cabins. Very minimal complementary services, if any, are provided. This class includes accommodation provided by: children and other holiday homes; visitor flats and bungalows; cottages and cabins without housekeeping services; youth hostels and mountain refuges.

Camping grounds, recreational vehicle parks, and trailer parks: This class includes – provision of accommodation in campgrounds, trailer parks, recreational camps and fishing and hunting camps for short stay visitors; provision of space and facilities for recreational vehicles. This class also includes accommodation provided by – protective shelters or plain bivouac facilities for placing tents and/or sleeping bags. This excludes cabins and hostels which are counted in holiday and short-stay accommodations.

There is a fourth accommodation category tracked by Eurostat that covers other, miscellaneous, forms of accommodation. This other category is primarily rooms and/or dormitories for students and seasonal workers. We exclude this measure from our Europe accommodation market size.

Sources

Skift Research’s accommodation sector estimates are based on our analysis of multiple third-party sources including Eurostat, the International Monetary Fund (IMF), and public company securities filings. These datasets were combined with our own internal data and insight aggregated from our previous reports and surveys.

The International Monetary Fund’s “World Economic Outlook” was used as our source for economy-wide GDP growth rates for the European and other select countries. These baselines were translated into our own, proprietary Skift Research estimates for future growth in the accommodation sector.

From Eurostat, we accessed primarily the tourism satellite account and the structural business statistics for the European Union. These are European-wide aggregations of data reported by each member state’s respective national statistics institute. The data is collected through a combination of surveys, business registers, and administrative sources (e.g. tax receipts) depending on the exact measurement and country. In the case of most countries, large businesses are completely enumerated while small business estimates are extrapolated from a smaller sample.

This methodology means that it only captures data from officially incorporated as businesses that show up on government registers. As such, it excludes much of the “Sharing economy” of unregistered home sharing listings on Airbnb and other similar sites. To correct for this undercount, Skift Research generated our own estimates for the size of the sharing economy in short-term rentals from 2011 (the start of Airbnb’s international expansion) onward. These estimates are included in our total market estimates for accommodation revenue in Europe.

However, we do not have operational statistics or other key performance indicators for the sharing economy in short-term rentals. As such, when these metrics (enterprise count, establishment count, operating margin, RevPAB, Occupancy, and ADR) are presented for short-term rentals, they are presented excluding the sharing economy. Further, it is not even clear that traditional performance indicators, such as occupancy rates, have the same relevance for shared rooms and apartments as they do for professionally run accommodations.

We believe that the impact from excluding the sharing economy is minimal as we estimate that, even on Airbnb, most bookings come from professional property managers captured by structural business statistics. Our estimate is that, in Europe, 24% of Airbnb, 6% of short-term rental accommodations, and 1% of overall accommodations bookings are generated by the sharing economy.