In 2013, the global hotel industry confirmed its good resistance to the crisis with a fourth year of growth in the RevPAR in a context of strong growth in the supply. Nonetheless, Europe lags behind in terms of performances. Upscale segments show the best results due to growth in average daily rates.
This year once again the hotel industry demonstrates its dynamism and the importance of its role in the global economy, proving itself to be a potential source of growth for certain markets that are experiencing difficulty. Despite the tension and political instability that reign in different areas around the globe –Syria, Turkey, Vietnam, the Ukraine, Thailand– nothing seems to stop the improvement of hotel performances and the development of hotel projects. Driven by the upscale and upper upscale segments in correlation to a constantly growing number of millionaires and billionaires, hotel activity progresses. Nonetheless, certain markets are losing speed and are struggling to revive the sector that is suffering from domestic clientele with weakened buying power and long-term unemployment.
The RevPAR's growth continues
The year 2013 marks new growth in the RevPAR of corporate chains for the fourth consecutive year it is estimated at 3.7% bringing it to 74 US dollars. The results reflect a positive global trend across all segments. At the same time, the hotel industry’s supply grew significantly in 2013, +3.2% representing 250,000 additional rooms with respect to 2012. The growth of hotel groups thus responds to the increase in demand and tourism flows worldwide. Despite the economic crisis in 2009 that generated a strong contraction of the RevPAR by 14.4%, the economy’s fragility in 2012 and 2013 made little global impact on the industry’s results and growth in the RevPAR. In 2013 the RevPAR is driven by growth in the occupancy rate (+1.2 point) and average daily rates (+1.8%). Growth in performance indicators is stronger on the midscale segment (+33.4% of the global chain supply) and the upscale segment (+38% of the global chain supply). The balance in 2013 shows 7% growth over 2012 in turnover from accommodations at hotel chains, which is globally estimated at 321 billion US dollars.
The signs of positive growth of hotel chains observed worldwide nonetheless reveal disparities with respect to geographic location and hotel categories. Occupancy levels are higher in the upscale and upper upscale segments. Properties on these categories are also experiencing the strongest growth in their RevPAR in 2013 thanks to improved daily rates. This growth is sustained by the vitality of international demand: up 3.1% for upscale hotels and +5.2% for upper upscale and luxury products. Results observed on the midscale segment are also very favorable with growth in the RevPAR by 3.6%. Occupancy rates are up by one point and average daily rates gain 2.1%. Budget and economy categories post more moderate growth. While the RevPAR on the budget segment continues on an uptrend (+2%) with moderate improvements in occupancy rates and average daily rates, the economy segment shows a drop in its average daily rate by 1.9%. This is due in part to the moderate evolution of rates for this type of hotel that meets the demand of domestic clientele that have been more affected by the economic crisis, and also by the massive development from one year to the next of the segment in the areas where prices are considerably lower. This results in particular from the development of Chinese groups.
US groups drive growth
In 2013, growth in hotel activity is driven by American groups and the recovery in North America, where increased average daily rates are driving turnover. In China, while economic growth continues at levels only dreamed of in Europe – around 8% – groups must face activity that appears to be slowing down at the same time that the supply continues strong growth, directly impacting industry results. Europe is also experiencing difficulties. Despite a rebound in occupancy rates after the crisis in 2012 in most countries and across the continent, average daily rates are struggling to resume growth in an economic context that is more uncertain and difficult for businesses and households.
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