Europe’s morale is at half mast. In August, its revenue per available room went into the red with a 2.8% drop. The occupancy rate of properties posts a clear 3.8-point drop, a phenomenon that is particularly evident in the upper categories. Growth of average daily rates proved to be too weak to counteract the drop in OR (+2.5%). The growth margin for rates is restrained by a poor economy.
It is necessary to look all the way back to August 2005 (-5.1%) to find drop in the European RevPAR by more than 2.8%. And yet, this “record” must be put into perspective because it also reflects a significant drop in Greece, which hosted the Olympics in 2004. Of course, results for Europe’s hotel industry were excellent in August 2007 (+7.8%). But the month of August 2008 was there to remind hoteliers of the difficult summers that Europe experienced between 2002 and 2004. Across Europe the occupancy rate dropped. Mid and upscale hotels were particularly affected by the loss of clientele. It was subject to the pernicious effect of the combination of the strong euro, expensive petrol and a slump in America’s economy. This conjunction of elements limited the growth of average daily rates in both categories. In comparison, economy hotels came out well. ORs follow the same downtrend, but this segment, which is less affected by the international economic situation, succeeds in increasing its average daily rates (+5.4% for 0* and + 5.1% for 2*). Over twelve months, the increase in the RevPAR reached 4.0%. But occupancy, which was still stable last month, slowly slid (- 0.7 pts).France (+ 0.6%) and the United Kingdom (+ 1.0%) are two of a kind. These countries are the only two that are seeing their revenue per available room on a rise. The others only have a long litany of drops. Germany (-1.3%) stands up for itself in this difficult context, as does, to a lesser extent, Belgium and Scandinavian countries. Spain, France’s competitor for the position as number-one tourist destination worldwide, experienced a bigger drop (4.4%). Catalonia, Costa del Sol, Ibiza: the same loss has affected all the motors of Iberian tourism. But this overall drop is nothing compared with Italy (-...
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