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Business travellers powering hotel recovery

A strong rebound is taking place in the amount spent on hotels in Europe, according to American Express’ research arm Business Insights.

Lodging spending in Europe overall grew 7% year-on-year in 2010, across Italy, Germany, France, Spain and the UK.

In Q1 2011 the market continued the trend with a growth of 4%, compared to Q1 2010.

The growth in spending is being largely driven by the return of the business traveller, said Sujata Bhatia, vice president for American Express Business Insights Europe and Asia.

Business travel spend on accommodation in the UK alone grew by 21% during the first quarter of 2011, she revealed.

Speaking to ABTN at a press briefing in London, Bhatia said: “Business travellers are an important segment and they’re back.”

Corporate travel acts as a “bellwether” for the travel industry as a whole, she said, so a recovery in the business travel segment is indicative of a wider return to growth.

London in particular, is “leading the charge” in terms of European recovery, added Bhatia.

The figures show lodging spend grew 5% in the UK in the first quarter of this year, compared to 4% in Italy and France, 2% in Germany and 1% in Spain.

Looking at the UK figures, London saw a 9% year-on-year growth in lodging spend in Q1 2011, while the other regions were flat or saw a fall.

Accommodation spend in the Midlands fell by 11% in the same period, while in the North of England it fell by 3%. Scotland and the South East were both flat.

While hotel spending has reached 2008 levels, Bhatia warned it is still not at pre-recession 2007 levels, and may never return.

The industry must wait for the peak summer months to tell whether accommodation spend this year will reach the lofty heights of four years ago, she said.

Likewise, the amount business travellers spend on accommodation is not at 2007 levels, and Bhatia suggested an increase in the use of virtual technology may mean it never fully recovers.

“We’re watching pretty carefully,” she said, to see what the “new normal” is.

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