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Analyses

August 2021 driving optimism up for the European hospitality

The beginning of the summer boosted the hotel performance but August has been determining. Nevertheless, the dynamics shows strong disparities with Southern Europe tending to pull up the results whereas Eastern Europe is still well below its pre-Covid standards. But overall, European countries have seen their performance rising compared to 2019.

At the European level, even though the overall hotel occupancy rate is still down 19.4 points compared to the pre-crisis period, it has kept increasing since the beginning of the summer: +11 points between June and July, +7.2 points between July and August, and now stands at 56%, attesting to the recovery of the tourism sector in Europe. The second month of August under the pandemic has thus proved to be much better than last year: +17.1 points of OR compared to August 2020, thanks in particular to the generalization of vaccination on a European scale.

 

In terms of range, the budget and economy segments were still the least impacted, with respectively a -8.2 and a -16.7 points drop in OR compared to the pre-crisis level. However, the midscale and upscale segments, which had been strongly affected by the Covid crisis, managed to gain 17.6 and 20.5 points on the occupancy rate relative to last summer, attesting that all ranges are recovering, each at their own pace. 

 

Furthermore, as for prices, the budget, economy and midscale ranges reached their pre-crisis levels with increases at 3.0%, 0.8% and 1.8% compared to August 2019. Only upscale hotels remain below their standards even though they manage to have an average price 10.9% higher than August 2020.

 

Thus, on a European scale, hotels recorded e significant increase in their RevPAR in August relative to July and, above all, much better than last year: +20.6% between July and August 2021 and +60.9% between August 2020 and 2021.

 

 

 

European tourists were attracted to Southern Europe for their vacations in August. After an excellent month of July, Greece achieved the best results of the continent in August as well: the country records the highest occupancy rate in Europe (60.8%, 9.5 points higher than the previous month) and thus manages to return to a RevPAR level only 18.5% lower than August 2019. Regarding prices, they have even exceeded their pre-COVID levels (+3.1% compared to August 2019).

 

Italy also recorded a great dynamic in August: the country is only 20.1% below its pre-crisis level thanks to a rise in prices (+5.1% vs. August 2019) and an OR at 51.6% (-16 points « only » relative pre-crisis).

 

Poland also stands out in August with an occupancy rate of 60.8% (behind Greece and the UK) which is only 15.2 points lower than August 2019. The country's RevPAR was also only 21.6% lower than August 2019.

 

The United Kingdom ranks second in Europe in terms of OR (62.9% in August, i.e., 13% more than in July). Nonetheless, the country records a RevPAR which is 35.5% below pre-crisis levels. Furthermore, due to the absence of international customers, the country has been constraint to contain its price increase (still -14% lower than in 2019).

 

France is also doing well in August with occupancy surging to 58.7%, 3.8 points higher than July 2021 and only -13.2 points lower than August 2019, making France the country with the closest performances to its pre-Covid levels.

 

For the second summer since the beginning of the pandemic, Greece, Spain and Italy fared much better than last year with +212.6%, +158.1% and +124.7% respectively. Even Portugal managed to do well in August after bad results in July: -37.1% drop in RevPAR in August (compared to -67.6% in July). 

 

In Germany, Austria and Switzerland, RevPAR results are also getting better reaching -30% and -40% compared to August 2019. Average prices are managing to return to their pre-Covid levels but occupancy rates are quite low.

 

Benelux is still suffering from the absence of international and business clientele with drops in RevPAR : -41.4% in Belgium (compared to 2019), -53.2% in the Netherlands, and -36.8% in Luxembourg. Nevertheless, results are heading in the right direction: all three have bounced in comparison to July where RevPAR declines compared to July 2019 were still extremely high (-60.8%, -65.3%, and -59.3% respectively).

 

Finally, Hungary, the Czech Republic and Latvia are still lagging behind with RevPAR levels close to or below -60% of their pre-crisis activity levels.

 

More generally, July was quite good for European hôteliers but August has been decisive: never since the beginning of the epidemic has hotel performance been so close to its pre-COVID standards. But will hoteliers be able to maintain this level of performance as the « business » months approach?

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