Hospitality SMEs are set to play a key role in Europe’s continued travel industry growth and resilience
Jan 17, 2025
Europe’s travel and tourism sector is a dynamic ecosystem driven by millions of businesses, with small and medium-sized enterprises (SMEs) at its core. These SMEs, which range from family-run bed and breakfasts to boutique hotels, play a vital role in driving local economies.
Key takeaways
- SMEs in the hospitality industry face more challenges than larger businesses, with studies showing a significant gap in business sentiment, highlighting the struggles smaller businesses face in a competitive market;
- Chain hotels benefit from brand recognition, advanced technology and better access to capital, giving them an advantage over independent SMEs;
- SMEs are more vulnerable to changes in consumer behavior and economic factors such as rising costs, energy prices or geopolitical issues. Independent properties, for example, are more affected by trends such as shorter stays and cost-cutting among travelers;
- Chain hotels now account for 43% of hotel rooms in Europe, reducing the market share of independents, most of which are SMEs;
- As global chains expand through brand consistency and loyalty programs, independent properties are under pressure to join chains or adopt new strategies to compete in an increasingly scale-driven market.
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