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Analysis

Slowdown in performance growth against a backdrop of supply expansion [1/2]

In 2016, the RevPAR of the global hotel industry is up 1.9%. Although this figure is down with respect to 2015 (+3.3%), these are nonetheless very favorable results: on the one hand because this is the seventh year of continuous growth and on the other because it happened within a context of strong recent growth in the hotel supply.

For more information, see the second part of this article.

Despite a difficult climate due to security issues following the terrorist attacks, conflicts in Africa, Middle East and Asia, and the global economic slump, 2016 closed with new growth in the RevPAR by 1.9%. While growth this year is less significant than in 2015 (+3.3%), which was already down with respect to the previous year, and occupancy rates are stagnating with growth by just 0.3 points versus 1 point last year, average daily rates continue to progress by 1.5% guaranteeing dynamic results. Since the crisis in 2009 that ended with a 14.4% drop, RevPARs have been systematically on an uptrend, resulting in a remarkably long cycle. Between 2003 and the onset of the crisis in 2008, the global hotel industry experienced a cycle with just four years of growth in the RevPAR.

Within a difficult context, the global hotel industry proved its strong resistance, which is all the more significant since the supply recorded a particularly dynamic growth cycle in recent years. In the last 6 years the corporate chain supply  posted 3-4% growth each year, resulting in nearly 25% growth in the supply across the period. The growth engines behind this development may be found in Asia and especially China.

2016 is thus a good year. Hospitality demand once again proved its solidity and turnover progressed once again by around 6% to settle at 480 billion dollars, setting a new all-time record. 

The upscale and upper upscale / luxury segments alone realized 55% of this turnover, while the midscale produced 32% and the budget and economy segments 13%. Changes in occupancy rate are relatively homogeneous from one category to the next in 2016, with +0.2 points in upscale and +0.6 points on the upper upscale / luxury segment. In 2015, occupancy rates produced more diverse results: while the budget and economy segments had already entered a period of stagnation, the mid and upscale categories continued to progress. In terms of occupancy, the year 2016 is characterized by a slump in the dynamic in the upscale hotel categories. The dynamics of average daily rates, instead, are similar from one year to the next. They are characterized by growth in average daily rates in the budget hotel segment (+2.5%) and the drop in prices on the economy segment (-0.5%). The midscale and upscale/ luxury categories grew by 1.2% and 2.2%, with the best results hailing from upscale properties.

If you wish to access the complete file, find the entire 2016/2017 worldwilde hospitality report on our store.

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