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December 2020: European hotels stabilize at a depressed level

After a month of November that continued to be marked by a relapse, and the tightening of sanitary measures, December proved to be also a difficult month for the hotel industry in Europe. Still dealing with the "second wave" of the COVID-19 pandemic, the continent remained under strict sanitary measures, although the effects and severity of these policies have somewhat stabilized across the region.

In Europe, hotels' occupancy rates continued to be very low yet slightly higher than in the previous month, reaching 16.1% (-45.8 points compared to December 2019). The average daily rate slightly increased from November as it reached €68 excluding taxes (-28.9% compared to the previous year). European RevPAR thus amounted to only €10.9 excluding VAT, a drop of 81.5% compared to the level recorded in December 2019.

Among the segments, upscale & luxury hotels continue to post the steepest loss, followed by midscale hotels: their occupancy rates declined by 53.5 points (to 9.6%) and 48.1 points (to 14.0%), respectively. Their average daily rates also fell by 19.3% (€72.3 excluding taxes) and 21.3% (€116.4 excluding taxes), respectively, leading to a drop in RevPAR of 81.8% and 88.1% compared to 2019.

The economy and budget segments, albeit the most resilient, saw their occupancy rates fell to 19.1% (-43.5 points) and 28.1% (-29.9 points), respectively. With average daily rates falling by 19.1% (€57.6 excluding taxes) and 12.4% (€49.5 excluding taxes), respectively, RevPAR fell to €11.0 excluding taxes (-75.3%) in economy hotels and to €12.2 excluding taxes (-57.5%) in budget hotels.

Whereas some destinations fared better before the onset of the winter season, especially those with a dynamic domestic market, over the course of December all markets stabilized at a depressed level. Switzerland (-47.0 OR pts. / -72.6% RevPAR), France (-35.3 OR pts / -73% RevPAR) and Luxemburg (-50.4 OR pts. / -81% RevPAR) were only slightly less affected by the general downtrend.

Conversely, countries such as Austria (-75.5 OR pts. / -94.3% RevPAR), Belgium (-60.7 OR pts. / -89.0% RevPAR) and the Netherlands (-55.4 OR pts. / -88.4% RevPAR) were among the biggest losers in the zone. Czechia (-96.1% RevPAR) and Hungary (-92.2% RevPAR), whose hospitality markets rely strongly on foreign demand, were even more impacted -as they have been throughout 2020.

Whereas some countries such as France somewhat loosened restrictions in December, others such as Germany and the UK stepped up their sanitary measures. Hopes of recovery for the hotel industry have been pushed back once again.

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