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January 2016: the year is off to a good start for Europe's hotels, while France remains behind

The year 2016 begins with growth in hospitality performance in almost all European countries. France, however, continues to suffer from the terrorist attacks in November. Inversely, Spain and Eastern European countries continue along a growth trend and produced the best results in the first month of the year.

After stagnation at the end of 2015 for European hotel chains, the year 2016 kicks off with growth in its indicators in January. The occupancy rate posts a slight increase (+0.2 points) to reach 53.8%, and the average daily rate is up by 0.5% to 84.3€. This growth allows the RevPAR to grow by 0.8% to settle at 45.3€. The increase in results affects all but the budget segment which saw its RevPAR fall by 1.7%, pulled down by a drop in occupancy that is not offset by increased prices. In the economy and midscale niches, the occupancy rate makes it possible to produce an increase in the RevPAR, while average daily rates follow a downtrend or remain stable. The upscale is almost the only category to show moderate improvement across all its indicators, in particular the average daily rate (+0.8%), which make it possible to post strong growth in the RevPAR (+1.2%).

Monthly results of hotel chains by country
January 2016

France continues to be affected by cancellations and postponements of reservations following November's attacks, which prevent recovery and cause a 5% drop in its RevPAR, although the provinces appear to less affected than the capital (read our article). It posts the strongest decrease in Europe, and is one of the few only European countries to see their hotel results drop across the month. The United Kingdom posts a drop in its RevPAR by 1.1% due to a slight drop in occupancy rates and average daily rates. Like Paris, London continues to suffer, but this raises no concern about what kind of tourism growth is expected in the country in 2016, 6 consecutive years after the increase in activity. On the other hand, the pound sterling began a significant drop in recent weeks. In the south of the Old Continent, while Portugal posted growth in its RevPAR (+2.4%), which was nonetheless held back by a drop in arrivals, results in Italy and Greece are also on a downtrend. Average daily rates fell in Italy, while Greece continues to suffer from its difficult economic situation and the migrant crisis. Nonetheless, in these countries that are dominated by international leisure arrivals, which are concentrated during the summer season, January is traditionally a slow month, and weighs down hotel activity across the year.

In the other European countries, growth in average daily rates and the RevPAR is widespread. Belgium, which was also affected at the end of 2015 by the aftermath of the events in Paris, posts a recovery of its hotel activity at the beginning of the year (+1.4% of the RevPAR), driven by an increase in prices. Germany and Austria both report increases in the RevPAR by around 2% on the month. The Netherlands continue the positive observed in 2015 and posts some of the best growth in results, driven by occupancy and prices, making it possible for the RevPAR to grow 8.4%, an increase similar Luxembourg's.

Spain and countries in Central and Eastern Europe did the best, producing the best results. Spain, which had a steady increase in its results and closed the year 2015 with record breaking international arrivals, kicks off 2016 at high speed, with prices up sharply (+7.4%), combined with an increase in occupancy, resulting in double-digit growth in its RevPAR at its hotels in January (+14%).

The CCEE, meanwhile, continue to drive growth in hospitality results on the Old Continent: they show the strongest growth in occupancy and average daily rates, and are the only ones together with Spain to record double digit increases in the RevPAR. In Poland (read our report), the RevPAR increased by +17.6% in January. Polish hoteliers benefited from the European men's handball championships at the beginning of the year, and from the launch of festivities in Wroclaw as European Capital of Culture (read our article). The country will then host the World Youth Day, which will generate more positive windfall for the country's hotel industry. The Czech Republic (+16.5% in the RevPAR) and Hungary (+13.1%) also post strong growth in results on the beginning to the year.

Europe's hotel industry thus experienced a positive, but heterogeneous, trend in January 2016; as for decreases observed in certain countries, they must be put into perspective by the generally low impact of January on annual results.

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