In general terms, all hotels in Europe overall experienced a 14 % improvement in rooms’ yield year-on-year to reach Euro 80. This translates into positive rooms’ yield growth for most cities in local currency as well. The story however is very different when the yield is measured in US dollars. Most cities recorded a decline in this sense due in the relative strength of the currency.

The report details how this impressive performance is linked to the increase in international tourism arrivals to Europe. Preliminary results from the World Tourism Organisation (WTO) indicate world tourist arrivals grew by nearly 7.4% during 2000 to reach 698 million arrivals. This level has been supported by a strong global economy and special events held to commemorate the new millennium.

Europe was the world tourism star performer in 2000 with an impressive 6.2% increase in international arrivals to reach 403 million visitors (nearly 25 million more arrivals than 1999). Events such as Euro 2000, EXPO 2000 and the Vatican Jubilee are all believed to have helped boost travel. Additionally, tourism to Eastern Europe revived with the end of the war in Kosovo, once again encouraging travel to Croatia, Slovenia and Hungary. Following several years of declining tourism, Turkey has shown signs of recovery.

Looking at the U.K. alone, the Andersen data records a decline in international arrivals, down nearly 2% to 24.9 million visitors. This was attributable in the main to the strength of sterling. The strong dollar and relatively weak euro however, attracted record numbers of American tourists to Europe, benefiting destinations both inside and adjacent to the EU. In this vein, London also beat Paris to the title of the most expensive destination in Europe, with hotels in the capital recording an average room rate of euro 199. Hotels in Paris came second with an average room rate of euro 185, followed by Geneva at euro 170. For the first time ever, five German cities managed to just breach the euro 100 barrier. Commenting on the report’s findings, Julia Felton, Global Hospitality Knowledge Manager for Arthur Andersen, said, "2000 was a particularly good year for the European hotel industry. Some of the markets that suffered during 1999 due to the war in Kosovo have recovered and overall, hotels have benefited from increased tourism arrivals. We anticipate yield growth to continue in the short term, although a slow down in the U.S. may result in reduced U.S. outbound travel, which may potentially impact performance in the major European capital cities."