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Europe : February under the sign of recovery

A clear uptrend. Europe’s hotel industry ended the winter months on a high note. After a month of January showing signs of improvement, February came to a close with growth in room revenue. Of course it is slight (+0.2%), but could this improvement during a weak period offer hope for a more marked recovery during a period of full activity?Hoteliers dare to hope.

While they have not regained the level of results of the year 2008 –far from it– Europe’s hotel industry is doing better. While activity is traditionally low in the month of February, the near-stagnation of the RevPAR (+ 0.2%) in the previous month is a fine sight to see and marks– we hope- the end of a long series of negative results. The positive return of the upscale category overall and of Europe’s motors such as Germany and the United Kingdom plead for a year of normalization of performances. After a January marked by a less significant drop in room revenue (–3.1%), February’s results highlight the timid, but real, recovery of business travel. Occupancy is up (+1.5 pt) or stable on almost all segments, aside from the hard budget. On the other hand, pressure on daily rates continues to be high (-2.5%). Several major cities are still marked by a penalizing price war. But the improvement of the OR should help put an end to this warfare relatively soon.It is rare enough to make a note of: the Czech Republic posted positive results in February (+5.6%). Of course, occupancy is below 40% and the average daily rate remains resolutely on a downturn. But nonetheless, this positive note testifies to an improvement in activity, which is also noticeable in neighboring Hungary. The United Kingdom, Germany and, to a lesser extent, France, the countries that weigh the most in the overall results, have also observed a benefic tremor in hotel results. While Germany (+0.7%) continues to be affected by a drop in daily rates, and France (-1.1%) continues to be penalized by sluggish domestic occupancy, the United Kingdom (+5.5%) may rejoice in the positive turn of its two indicators. With an OR close to 70%, British hoteliers have more leeway for boosting its daily rates. Sweden (+4.6%) and Portugal (+8.3%) are the two other great beneficiaries at the beginning of this year that has begun under the sign of recovery. With results equal to last year’s, Belgium (+0.7%) and Italy (+0.0%) are breathing a bit better while Spain (-1.3%) is back on a climb. The Netherlands (-4.7%), instead, are still stuck in a damaging price war. Other disappointments: Denmark (-13.7%) and Poland (-7.8%).

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