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Europe: September 2010 marks the end of a two year drop in RevPAR

Business activity is off to a fast start after the summer break. Europe’s hotel industry is taking advantage of it to post sopme of the strongest growth in recent months. With occupancy up by more than 5 pts, average daily rates could climb by 3.5% for growth in the RevPAR by 11.3%.

Europe’s hotel industry which in recent years had got in the bead habit of seeing the bottle half empty is happily regaining a more optimistic outlook on the future. With properties three-quarters full – the OR averages 75.9% - professionals were able to adjust their rate policy up in support of their properties’ performances. While from 2* to 4* occupancy rose by 5 to 6 points, each of these categories was able to be more aggressive about pricing while remaining cautious about their clientele being willing to accept the change: average room rates rose by + 4% on the 4* and +2% on the 3* and 1*. The 2* segment is slightly behind with a + 0.8% increase. These excellent results allow room revenues to attain double digit growth in September and, also and above all, thanks to that the RevPAR on twelve sliding months shifted into the green (+1.7%). Which had not happened since October 2008!Aside form Austria (-12.0%), penalized by its capital Vienna whose year 2010 was not so prolific in terms of medical conventions as in September 2009, Europe’s entire hotel industry is in fine shape. Its three pillars – the United Kingdom (+14.9%), Germany (+17.6%) and France (+13.7%), which, thanks to the extent of their offer and economic weight, set the trend overall– set the tone for vigorous growth for this month that is traditionally strong. Alongside them, many countries posted double digit growth in their room revenue. Spain (+13.8%) is among these, boosted by Barcelona which hosted the European Respiratory Society, the biggest worldwide convention dedicated to respiratory medicine, which was held in Vienna last year. Belgium and the Netherlands, the two neighbors, post identical results at +11.5%. A positive note for the Netherlands’ hotel industry: the sharp growth in occupancy rates allows its daily rates to engage in the forward march. Hungary and the Czech Republic’s clear return to health with ORs higher than 80%, is also resulting in positive windfall in terms of rates. This is not the case in Portugal where, to reach an average OR of 80.3%, hoteliers had to make efforts in terms of pricing (-7.4%), a sign that the cycle has not yet taken off again in the westernmost country on the continent.

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