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Analyses

January 2021: the European hotel industry remains stuck in a hole

While the year 2021 began with hopes raised by the arrival of vaccines, the European hotel industry remained at a standstill in January. Amid health instability brought by appearance of variants, the hotel sector is still suffering from the strict measures that are hampering its activity and recovery.

Following a very severe month of December (-81.5% of RevPAR in the zone) and despite the opportunity that the end-of-year festivities brought, January still does not herald the beginning of a recovery in view of the still alarming results in Europe, where RevPAR is down 80.5% compared to its 2020 level, amounting to €10.6 excluding VAT. This continued loss is explained by the combined fall in the occupancy rate and average price of 43 points (to 16.3%) and 28.9% (to €65.2 excluding VAT), respectively.

Among the categories, the results are significantly similar to those observed in December 2020, and the upscale & luxury segment, followed by midscale, once again suffered more than the others. Their respective occupancy rates were only 8.6% (-52.3 pts) and 14.1% (-45 pts), with an average price down 26.3% (€103.3 excluding VAT) and 16.8% (€72.9 excluding VAT). This means a loss of 89.6% RevPAR (€8.9 excluding VAT) for upscale & luxury hotels, and a loss of 80.2% RevPAR (€10.3 excluding VAT) for midscale units.

However, the economy and budget segments, which are usually more resilient, are not far behind. Their occupancy rates fell to only 19.7% (-39.7 pts) and 28.7% (-27.2 pts), with ADR falling by 15.4% (€58.5 excluding VAT) and 10.2% (€44.2 excluding VAT), respectively. RevPAR for the economy segment thus fell by 68.7% (€11.5 excluding VAT) and that of the budget segment by 53.7% (€12.7 excluding VAT). 

 

Among European countries, France stands out from the pack, with a slight increase in results compared to December, unlike most of its neighbors. Its results are still very weak, with an occupancy rate of 24.6% (-33.1 pts), an average daily rate down 30.3% (€64.2 excluding VAT) and a RevPAR that fell by 70%, but the drop is not as abysmal as in most other European countries. Conversely, Germany, which had been resilient until now, saw its results plummet (-49.8 pts occupancy rate/ -88.4% RevPAR) while the country has resumed strict health measures. 

In the previous months, results were more heterogeneous, due to the exposure to international customers and the dynamism of the domestic market. In January, losses were relatively similar between countries, with RevPAR declines ranging from 80% to 93%. Countries such as Luxembourg (-46.5 pts OR / -80.4% RevPAR) or Switzerland (-45.6 pts occupancy rate/ -81.2% RevPAR) still fared relatively better, while the Czech Republic (-49.7 pts occupancy rate/ -93.1% RevPAR) continued to record the worst results, this time followed by Austria (-56.9 pts occupancy rate/ -92.7% RevPAR).

The results thus appear more homogeneous but remain at historically low levels. At a time when health policies are turning towards vaccination, the European hotel industry will have to wait for a recovery.

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