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Analyses

September in Europe, business is still disappointing

The European hotel industry is keep up with the pace of decreased performances, around -15% in RevPAR. The month of September, a good indication of the economic climate with its large majority of business clientele, has not posted a real improvement, especially on the ADR side.

The European hospitality market in September demonstrates a form of stabilisation of its global performances. But it is not satisfactory. The Revenue per available room drops by 15,4% pour the month only and by 15.3% for the rolling period of the last twelve months. Eventually, the return to business is less favourable for the hotel industry than the summer vacations. It is only another proof that the Business clientele, mostly the international one, is still very tight on travel expenses et has not yet recover con.dence in the potential economic growth on the short run. This attitude is not good for all hotel categories, with the only exception of the hard budget segment. Obviously, the upscale end of the market is the most affected as during the previous months. The September month, traditionally very active, experienced a new drop in de­mand (-4.8 pts). In the last two years, the average OR in September has diminished from 79.1% in 2007 to 70.5% in 2009. It is a heavy burden for hoteliers who try to keep their tariffs. Actually the ADR has lost over 10% during the last month. This scenario is due to be the rule for some months to come. If a few European cities can ex­pect a slight improvement in OR, they will have to wait further to experience a better situation in terms of ADR.Only a few countries can be satis.ed looking at their performance last September. Austria, thanks to good results in Vienna, which bene.ted from several large medical conventions, experiences the slightest decrease of them all in the European .eld (-3.6%), with France coming se­cond, the only other European country to post a 1-digit figure drop in RevPAR (-8,0%). On the contrary, if Austria can play its tune on a allegretto mode, its neighbouring countries of Central Europe are following a very slower tempo. Hungaria (-24.8% in September) and the Czech Republic (-39.6%) have long lost the rhythm of growth that was theirs only two years ago. However, the news are not exclusively negative and sad. Several large European cities can demonstrate at the same time very high occupancy rates and a limited drop, even some times a real increase of their hotel activity: Barcelona for example (-1,0 point), Geneva ((-0,8 point), Paris (-0,7 point), Porto (0,0 point) Rome (+0,1 point), London (+1,7 point), Moscow (+3,5 points) and Istanbul (+7,8 points). It is only fair to say that these results have been reached with a strong ta­riff decrease (-23.6% in Rome and -40.9% in Moscow), but let’s hope that these performances are rather encouraging for the future.

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