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March 2016: sun showers cloud Europe’s brightening skies

Following several months of widespread growth, contrasts can be observed when it comes to performance for each country. Overall, March brought positive results for European hotels - with a few exceptions.



Overall, March brought positive results for European hotels, reporting a 0.9 point gain in occupancy rate to reach 66.3%. Combined with a 1.3% increase in average daily rate, Revenue per Available Room (RevPAR ) improved by 2.4%.  Change in performance is more pronounced in some segments: budget hotels posted the strongest growth in RevPAR (+3.5%), followed by the midscale (+2.9%) and economy (+2.7%) categories, and finally upscale hotels (+2%).

Monthly results of hotel chains by country
March 2016

Despite widespread growth, contrasts can be observed when it comes to performance for each country. Factors such as the migrant crisis – whose consequences affected tourism in certain destinations – and the security environment following the Brussels attacks in March had an impact on hotel performance in several key destinations across the continent. As the country was directly targeted by terrorism, Belgium’s RevPAR dropped by 13.3%, mostly due to a 9.2 point decrease in occupancy rate. Other European capitals, such as London and Berlin, were also affected by these events, raising doubts about European security in the eyes of foreign clientele. Germany (-1% in RevPAR) and the United Kingdom (-0.9% in RevPAR) were therefore not able to hold up hotel performance in March. Finally, while France regained a growth track (+2.1%), especially thanks to improvement in the provinces, Paris is still recovering from the consequences of the November attacks on tourism.

However, there is still good news for European hospitality, as several markets posted positive growth with the arrival of spring. Czech Republic has beaten monthly records, with 24.4% growth in its RevPAR. The organization of several international medical trade shows in Prague significantly stimulated hotel performance. Netherlands were also among the frontrunners in the European landscape (+20% in RevPAR), as hotels benefitted from the organization of the ISU Speed Skating World Cup and biannual events such as Fespa Digital Amsterdam. Hungary also registered positive results, with a 12.3% increase in RevPAR due to gains in occupancy rate (+3.2 points) and average daily rate (+6.7%).

Finally, performance across Southern Europe continued to improve, boasting higher results than in March 2015 – already an excellent month in the region. RevPAR in Portugal grew by 18.6%, whereas it increased by 13.7% in Spain.

Since the beginning of the year, the trend remains positive for European hotels. From January to March 2016, a 0.6 point increase in occupancy rate and 0.9% growth in average daily rate allowed the RevPAR to improve by 1.9%.

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