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May: overall improvement

After an April that was not so bright, the European hotel industry shifted into high gear in May.The RevPAR rose by more than 8% in this month of May.The mid and upscale segments in particular actively support this cheering growth thanks to growth in both occupancy and Average Daily Rates.

The cold spell last April was quickly forgotten with the arrival of finer weather. May made it possible to forget a month of April that was unstable and during which Europe’s hotel industry posted the first slump in its RevPAR since August 2005 (reminder: -2.6%). The outcome was inversely positive for the entire month of May and Europe’s hotel industry has reasons to rejoice. The Revenue per available room rose by 8.5 % with respect to the same period in 2005. All figures are up, particularly those of the higher categories that post growth by more than 8% with a record 10.0% for 3* throughout Europe.The Nordic countries are also on the same wavelength with growth in the RevPAR by 7.8% in Denmark and 3.2% in Sweden. Eastern European countries, on the other hand, continue to post switchback results. The change in Revenue per available room is positive for Hungary (+ 5.6 %), but negative in the Czech Republic (- 18.0%) and in Poland (- 14.7%). Despite these little slumps, May 2006 posts the highest growth in RevPAR since April 2005. The coming summer period could offer excellent surprises for destinations that are running before the wind once again.In recent months, growth in the RevPAR was generally sustained by bolder rate policies made possible by a better economic situation. Last May, average daily rates continued to progress, posting a 4.4% increase from one year to the next. And the occupancy rate did more than maintain this favourable trend with growth by 2.7 points for the occupancy rate.Occupancy rates are on a distinct up trend on the mid- and upscale segments where growth was by more than 3 points – and more moderately in the economy segment (+ 1.0 point).The improvement observed in May for Europe’s hotel industry is evident in the analysis of each country’s performance. Germany did very well with revenue per available room up by more than 28%, exception for Hanover. This city suffered the lack of major trade fairs such as Ligna, which drew 100,000 visitors from the wood industry in May 2005. Virtually all the major cities posted double-digit growth in their RevPAR thanks to parallel growth in the occupancy rate and average daily rates. 3* and 4* properties, that constitute the majority of the chain hotel inventory in Germany, benefit first and foremost. They watch their revenue grow respectively by 30.2% and by 29.0%.In the rest of the European union, other countries that did particularly well last May are the Netherlands and Belgium. Belgium also surpassed 20% growth level of performance with 24.6%. While Brussels is in fine shape, Flemish Antwerp and Walloon Liege both progress together with the rest of the territory. The Netherlands posts growth in its RevPAR by close to 20%, thanks to growth in its average daily rates, particularly for upscale properties in the cultural capital of Amsterdam that is celebrating the 400th anniversary of the famous Rembrandt’s birth.Further south, the Latin countries are doing well also. Italy and Spain post excellent results with growth in the RevPAR by 6.1% and 7.5%, thanks in the first place, to clear increases in room rates. In May, their results were almost identical to France’s and the United Kingdom’s which for many months have posted results that are more than satisfying. For twelve months running, Spain and Italy post some of the strongest growth throughout the continent. Spain’s hotel industry seems to have got over the difficult period it has been going through in recent years.The Nordic countries are also on the same wavelength with growth in the RevPAR by 7.8% in Denmark and 3.2% in Sweden. Eastern European countries, on the other hand, continue to post switchback results. The change in Revenue per available room is positive for Hungary (+ 5.6 %), but negative in the Czech Republic (- 18.0%) and in Poland (- 14.7%). Despite these little slumps, May 2006 posts the highest growth in RevPAR since April 2005. The coming summer period could offer excellent surprises for destinations that are running before the wind once again.

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