Access the main content

News

Despite London’s bombings, the recovery continues

In the end, the tragic bombings that hit Great Britain’s capital in July did not have a major impact on trends throughout Europe.The RevPAR rose by 2.8% in July under the effect of an occupancy rate up by 0.4 points and an average daily rate up by 2.1%.

In July, the growth trend of Europe’s hotel industry continues along the trajectory laid out in the previous months with a revenue per available room up by 2.8%. The RevPAR is on a positive bent across all categories. Economy categories are experiencing a slight drop in occupancy, while the opposite is true for 3* and 4*, confirming June’s uptrend. Finally, the upscale segment reported better results than the other segments (+ 3.3% for the RevPAR) thanks to the simultaneous growth of its OR and average daily rate. Long-haul clientele seem, to a certain extent, to have found their way back to the Old Continent.At the end of July, Europe’s hotel industry remains steadfast in its growth trend (+3.6% growth in the RevPAR across 12 months end July). Nordic countries and countries in Central Europe should report the best results at the end of the year. Only Italy and Spain are experiencing medium-term difficulties. Nonetheless, this should not last since these two countries have much to offer.Last July all eyes were on London. After the British capital’s particularly happy ending in the race for the Olympic Games in 2012, two series of bombings - July 7 and July 21 – left their unhappy mark on it. What was the immediate impact on the hotel industry? July’s results show an occupancy that is down, which is is logical. A 5-point drop, however, is nonetheless not too much. Faced with the events, London’s hoteliers did not give in to panic and the temptation to slash their room rates. On the contrary, average daily rates remained stable. Clearly these terrorist attacks explain why the United Kingdom’s RevPAR is down for once (-1.9%). Its provinces, however, did not experience a massive loss of interest; it even benefited from a carry over of clientele from the capital towards the rest of the country.Once the shock was over, what could the impact of the bombings on tourism be in the months to come? While authorities could be relatively optimistic about a rapid recovery after the first series of bombings, the second wave may have left a deeper scar in people’s minds. The second semester could prove less brilliant then expected, both in terms of reservations and revenue, with a more significant drop for domestic than foreign clientele. In the long term, however, like Madrid, which was marked by bombings in March 2004, London should also return to its growth trend. Tourism beat all records in the first semester 2005, and year-end results should be distinctly positive. In order to support the tourist industry, Visit London proved its reactivity by launching several campaigns including “London in September” and a far-reaching media plan in its key supply markets.Germany’s performance is basically the same as last year (-0.3%), with results that are very different depending on the destination. “July, which is relatively calm for the Business segment, was not as good as last year,” states Cornelia Hoffmann, Director of the Golden Tulip Park Consul in Berlin, “while occupancy was relatively good, average daily rates are down due to growing competition. The number of tourists increased but not at the same rate as openings, particularly in the upmarket segment,” adds Cornelia Hoffmann.Further north, Scandinavian countries continue to report good results. Denmark and Sweden show growth by more than 10% over 2004. On twelve cumulated months, Sweden, with average daily rates exploding, shows record growth of its revenue per available room: +17.8%! Results are also good for the Netherlands (+ 8.5%) and confirm the recovery and occupancy observed over the past several months. Although tourists were present only from mid-month, Amsterdam had a very good month thanks to a Business segment that is up over last year. “Tech Ed, a major conference held at the RAI Convention Center end Junebeginning July, set the month off to a good start. We applied high rates when Corporate demand was strong, then we adopted a different strategy to support tourism,” explains Nikki Martina, Sales & Marketing coordinator at the Renaissance Amsterdam. Inversely, Belgian hotels had a more tenuous month of July and doesn’t appear to be fully enjoying the potential of its 175th birthday. Its occupancy rate was down by 2.1 points and the RevPAR shows timid growth by 1.3%.After a difficult year 2004 in terms of tourism, how did countries on Mediterranean shores react last July? France and Italy, after Rome (see Zoom), seem to be headed in the right direction with growth rates close to 4% or more. Spain, meanwhile, shows no growth with results that are identical to last years’ July results. At that time the country that leads the world’s tourism industry dropped by 8.5%. Eastern Block countries also show contrasting results. While Hungary had a very good month of July with growth by 28.9% thanks to average daily rates that are up significantly, Poland appears as the bad student with average daily rates down by 15.4%. Warsaw remains a difficult market. Prague also suffers competition from Budapest, Vienna and even Croatia. Although the occupancy of hotels in the city are closing in on 80%, “after a boom in 2004, the city seems less attractive. We didn’t have to do anything to fill our properties, not even a special offer. Today, this is not the case,” indicates Irena Dudac-kova, executive manager of the Art'Hotel Praha.

This article was published over a month ago, and is now only available to our Premium & Club members

Access all content and enjoy the benefits of subscription membership

and access the archives for more than a month following the article

Register

Already signed up?

An article

Buy the article

A pack of 10 articles

Buy the pack
Loading...

You have consulted 10 content. Go back home page or at the top of the page.

Access next article.

Sign up to add topics in favorite. Sign up to add categories in favorite. Sign up to add content in favorite. Register for free to vote for the application.

Already signed up? Already signed up? Already signed up? Already registered?