Access the main content

News

Europe: A promising return to business

Thanks to growth in average daily rates by nearly 3%, Europe’s hotel industry posts net growth in its RevPAR (+ 3.6%). September, which marks a recovery for the economy after the summer pause, constitutes an encouraging return to business for nearly all the European countries.

September marks a recovery for the economy throughout Europe. The global RevPAR posts growth by 3.6%, which is higher than the average across the last twelve months (+2.1%). The net growth of average daily rates alone explains these good results (+ 2.9%). Occupancy rates are, in fact, pretty much the same as last year (+ 0.5 point). There is no major disparity: each of the hotel categories posts performance that is quite close to the average. Nonetheless, the super-economic and upmarket categories prove to be more effective with respect to September 2004. With a 4.2% increase in its RevPAR, the 4* segment comes out the big winner for last month. On twelve months running, everything looks good for all categories.All is well in Belgium too. The Low Country was not used to holding the place of honour in recent months. Yet, Belgian hoteliers are posting one of the most significant increases in revenue per available room in Europe (+15.7%). Average daily rates even post doubledigit growth. This increase did not impact occupancy, which even rose by nearly 4 points. “September was a good month with respect to last year. Brussels hosted many events during this period: Decosit, Labelexpo, the Francorchamps Grand Prix Formula 1,” explains a spokesperson from Le Méridien Brussels. Across the border, meanwhile, hoteliers are no less satisfied with a RevPAR that continues to climb (+4.3%). The Dutch upscale hotel market, in Amsterdam in particular, boosts the overall resultsWe must look towards the East of Europe to find the rare declines for this September. The Czech Republic and Poland post relatively significant drops in their revenue per room. While the occu- pancy of Czech properties remains higher than 85%, hoteliers are adopting a very aggressive rate policy in their battle against competition from other positioned destinations. And this practice brings down average daily rates (-19.2%) and RevPAR (- 20.5%) along with it in a spiral. Poland, meanwhile, sees its occupancy make clear progress. But the growing demand for properties in this country does not affect the results on the whole. In one year, the value of the zloty grew significantly with respect to the euro. European clients, Germans in particular, are not ready to undergo major variations in their rates. Moreover, competition within the market of Warsaw remains strong. These two elements have brought average daily rates down (-18.1%). On the other hand, Hungary is boosting the image of the new arrivals to the EU with growth in its RevPAR by 16.5%.Mediterranean countries also present contrasted results. The transalpine hotel industry suffers from the surrounding economic depression. The RevPAR is down by 0.8% while average daily rates post a drop by 2%. On one year, performance is balanced (+0.2%). With respect to the previous year, Spain is the only country that posts a drop in its performance (-3.1%). Nonetheless, results for September are encouraging. The revenue per room is up by 2.3%. The figures for Spanish hotels leave room to hope that the development of the supply in previous years will be absorbed progressively. The performance of German properties is stable over the previous year, a very good month notwithstanding since the RevPAR in Germany had risen by 8.4% in September 2004. Occupancy rates (-0.2 point) and average daily rate (+0.1%) are in line with last year’s results. Several markets remain difficult due to overcapacity and a strong dependence on domestic clientele. But on the whole, the year 2005 is beginning a recovery particularly in Berlin where average daily rates are up. Revenue per available room is up by 2% on twelve cumulated months thanks to an occupancy rate that is up by 1.4 points. Sebastian Heinemann explains this phenomenon: “the DAX (indicator on the German stock exchange, the equivalent of the French CAC 40) rose back up by 20% since the beginning of the year. Thus, business travel has grown.”The director of the hotel Atlantic Kempinski in Hamburg has reasons to rejoice over the past month: “Our revenue progressed by 13% over last year.” One reason for this performance: growth on the Meetings segment by “+36% over September 2004”. The director is waiting for next year impatiently as it is marked by the FIFA World Cup. With the spotlight on Germany, the year 2006 is promising in terms of business tourism. “We forecast growth in our revenue by 6% for 2006 and growth in operating re sults by 30%,” confirms Sebastian Heinemann.After two months of a slight drop, the result of the terrorist bombings in London, the United Kingdom is resuming its march forward (+1.6%). This is a good result overall, even if occupancy rates are down on the previous year. On twelve cumulated months, the United Kingdom posts growth in revenue per room by 3.8%. Other beneficiaries of the previous month are Nordic countries, which are also used to posting results that are clearly positive. And September doesn’t escape the rule +17.9% in Sweden and +6.4% in Denmark.

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?