Access the main content

News

July: Europe’s hotel industry hits rock bottom

Certainly 2007 was an excellent year, but July 2008 nonetheless leaves hoteliers worried. Occupancy rates were way down in all European countries. Fortunately, most of them were able to compensate for this drop with higher daily rates. Europe’s hotel industry ended the month with a RevPAR up by 3.3%. But doubt remains for the months to come.

Astrong Euro, expensive petrol, a slump in America’s economy, swelling inflation: the hotel industry is feeling the effects of this potentially explosive cocktail. The uncertain economic situation is etched in the minds of travelers when they pack up their suitcases, or not.... Unanimously, no single European country reported growth in occupancy last July. Not one hotel category resisted the drop in occupancy rate that globally dove 1.4 point. Is this an upheaval or small blip on the screen? A turnaround for the cycle or a brief halt related to summer? On twelve months, the overall trend remains globally positive. Occupancy has been stable with respect to a good 2007 (-0.1 pt) and growth in room revenue remains strong (+4.9%). In July, the most developed countries in terms of chain hotels are doing well. Thanks to efficient yield management, the average daily rate supports room revenue with 5.4% growth. There is still a maneuvering margin in the economy hotel segment (+7.3%) as there is in the upscale segment (+5.9%). What will happen if this shrinks?The leaders resist. Faithful to its role as the motor behind Europe’s hotel industry and as one of the rare countries with a nearly stable occupancy rate, the United Kingdom posts clear growth in its RevPAR (+8.1%) last July. This result is to London’s credit more than that of a struggling British province. The British capital felt the beneficial effect of the Farnborough Airshow that is held every two years during this month. Supported by Paris and ranking second in terms of growth, France comes out well with 4.0% growth. Germany doesn’t suffer too much either from a major loss of clientele (- 0.3 pt), confirming its position that is increasingly affirmed on the European tourism checkerboard. Inversely, Italy, a favorite vacation destination, but that posts some of the highest prices in Europe in July, suffers at a time when buying power is a subject of concern (-10.5%). Another country that is down significantly: the Czech Republic, which is no longer considered as an inexpensive destination. While the hotel supply continues to grow in Prague, occupancy is about to drop below 70%.

This article was published over a month ago, and is now only available to our Premium & Club members

Access all content and enjoy the benefits of subscription membership

and access the archives for more than a month following the article

Register

Already signed up?

An article

Buy the article

A pack of 10 articles

Buy the pack
Loading...

You have consulted 10 content. Go back home page or at the top of the page.

Access next article.

Sign up to add topics in favorite. Sign up to add categories in favorite. Sign up to add content in favorite. Register for free to vote for the application.

Already signed up? Already signed up? Already signed up? Already registered?