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April 2017: European hospitality has the wind in its sails

Despite slower growth than the previous month, European hospitality figures are still pretty good, with 4% growth in the RevPAR. The only drawbacks in this favorable trend: calendar effects likely to affect some markets, and difficulty increasing daily rates in certain segments and countries.

While growth in European hotel occupancy is slower in April 2017 than it was in March; several countries have suffered significant drops, pulling the Union's average down. Nonetheless, the overall occupancy rate is up by 2 points, while +3 points was recorded last month; the trend remains generally positive.

April 2017: Monthly Hotel chains results by category

Nevertheless, in Germany the 'calendar gap' has had a tremendous impact on its performance: the RevPAR fell by 17% in April following double-digit growth in March, bringing growth down to 0.6% since the start of 2017. Aside from a less suitable exhibition calendar, the upcoming general elections (next September) have apparently brought a certain level of passivity. Poland's results are also down, but this is with respect to an excellent month of April last year, notably in Wroclaw, then European Capital of Culture.

The two other major players on the European hospitality scene - the United Kingdom and France - have adopted better strategies and offset Germany's temporary weakness. Despite the tragic terrorist attack near Westminster in London, the country did not suffer any drop in tourism contrary to the other side of the Channel following terrorist attacks in Paris and Nice. British growth is, however, mostly driven by prices (+5.6% in local currency), although the occupancy rate remains on the rise (+1.3 point).

France's hospitality sector is regaining its dynamism, although here, too, the 2016 base is partly responsible for the tremendous increase in its RevPAR (about 10%). Belgium is on the same level of growth with a double-digit increase in its occupancy rate. The only thing that needs to be done is to adjust prices to their previous level in 2015: France's prices remain stable compared to 2016, while Belgium's goes down (-2.7%) enabling it to generate double-digit growth in its occupancy rate.

Southern European countries are celebrating: Spain confirms its economic and tourism revival with +17% growth across the month featuring Holy Week. Greece benefits from arrivals that previously went to Turkey. Portugal follows the same positive trends with impressive figures (+31%), although across a smaller base. Hungary and Czech Republic also benefit from double-digit growth.

Italy, which had not yet entered the recovery, is finally on the right track (+6.1% over the month, +5.4% year-to-date). The year 2017, traditionally more favorable since it's an uneven year, has not yet benefited from positive repercussions generated by the Venice Biennale, which will take place from May 13 to November 26.

There is generally a favorable trend across Europe's hospitality landscape in April, featuring an increase in the occupancy rate. Average daily rates continue to lag behind with an increase by only 0.8% across the month and by 1.9% since the beginning of the year. While the upscale range has generated a slight price increase (+2.6% in April and year-to-date 2017), this is not yet the case for the midscale and economy sectors, where prices went down again this month (-0.6% and -0.5%), although they have been on the rise since early 2017 (+1.6% and +0.9% respectively). Is this a preview of real growth to be seen this summer?

Also read:

  • March 2017: Europe's hotel industry leaves its doubts behind
  • February 2017: the growth dynamic continues for European hoteliers
  • January 2017: overall improvement in the European hospitality industry

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