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September: an excellent return to business throughout Europe, with France in the lead

The renewal of economic activity after the summer noticeably benefited Europe’s hotel industry.Thanks to growth combined with average daily rates (+3.1%) and occupancy (+1.6 points for the occupancy rates), room revenue was up 5.2% in September 2006, a promising month for most countries in the EU. France is at the head of the class this fall with a RevPAR up by 7.1%.

Strategic in more than one way for European hoteliers, September 2006 closes on a very positive note. Room revenue rose by 5.2% for this month that saw business activity resume after the summer season. Like last year- a RevPAR up by 3.6% in September 2005 – Europe’s hotel industry had another successful return to business. This was thus encouraging in more than one way. Hoteliers continue to make their rates grow (+3.1%) without seeing a drop in occupancy (+1.6 point). In previous months, the upscale category improved all results up. In September, it continued to see its performance improve with respect to the previous year with a 4.4% increase in the RevPAR.After a very good August, Belgium did not do a repeat performance of last September (-6.0%), nor did it repeat the previous year when the country posted record growth for its RevPAR (15.7%). Average daily rates remain down (-6.1%), particularly in Brussels, which hosted several salons last year. Belgian hotels may also have suffered from the absence of the Formula 1 Grand Prix Spa- Francorchamp on its calendar. The trend nonetheless remains in favour of Belgium on twelve cumulated months with a RevPAR up by 37%. Other countries with their morale at half-mast are those in Northern Europe. Sweden reported an 11.6% drop in performance and its Danish neighbour a 5.0% drop. In September, Scandinavian hoteliers implemented an aggressive rate policy (-11.6 % in Sweden) to sustain occupancy that remains stable with respect to last year.But this month the economy categories hold the place of honour. The 2* segment in particular since its RevPAR rose by 9.0% thanks to strong growth of the average daily rate (+5.6%) combined with a 2.5 point increase in occupancy rate. The supereconomy categories are all aligned with this favourable trend with a 5.2% increase in average daily rate for the 1* and 4.3% for 0*. These bolder rate policies reflect optimism felt by hoteliers who foresee growth in demand for these low cost products. In any case they reflect a certain amount of optimism for the months to come. On twelve cumulated months, the overall increase in average daily rates (+ 4.0%) allows Europe’s hotel industry to post growth in the RevPAR by 5.9% across all categories.Among those countries in the forefront this month is France, which had a very good September. And autumn continues along the same trajectory as the summer season: excellent. Neither foreign competition nor drop in buying power could slow frequentation, which even rose slightly over 2005 (+1.2 point). But it is above all the breakthrough of the average daily rate (+5.5%) that makes it possible to rejoice. Most of the growth occurred in the major cities and the shoreline, pulling indicators upward, with a global RevPAR up by 7.1% over September 2005. The clearcut recovery of business tourism, with many trade fairs and seminars, joined forces with leisure tourism that is still alive and well (for several years the summer peak season has lasted for more than July- August). "There is also a short term effect of the market recovery," observes Marie-Béatrice Lallemand, general manager of the luxury division of Louvre Hotels and general manager of the Crillon in Paris. "And strong markets such as the United States, the United Kingdom and the Middle East were at roll call". To all this we must add the contribution of the BRIC (Brazilians, Russians, Indians, Chinese) whose presence in the Capital is getting stronger each year.Along the coast, professionals could observe a strong presence of European clientele that was equivalent to or sometimes higher than it was in 2005 during the same period. "Fine weather helped and in the end we had many English and Spanish clientele," confirms Isabelle Mendès, receptionist at the Tulip Inn Biarritz Louisiana. "They, more than domestic clientele, enable good occupancy rates in the fall. There are many Dutch, meanwhile, in July and August but they are rare outside that timeframe".Germany, meanwhile, continues along the trajectory it began with the World Cup. In September, German hoteliers could be pleased with growth in their room revenue by 8.3% thanks to an increase in room rates. Upscale hotels are the first to benefit from the great return of business travellers. The 4* category posts an average daily rate up by 6.8% to 117.30 euros for growth in the RevPAR by 8.4%.In the United Kingdom one might say it’s "business as usual": month after month, British hotels continue to be shamelessly fit with growth in the RevPAR by + 8.0% last September. Properties on the other side of the Channel show the strongest monthly increase in occupancy rate (+3.6 points). Growth in the room revenue is also impressive in the Netherlands, which flirts with 10% increase (+9.4%). Benefiting from a good tourist season this fall and growth in business tourism particularly from the United States and Japan, the Dutch hotel industry surpassed its very good results of September 2005.Mediterranean countries may also be satisfied with the past month. Italy (+3.0%), and Spain even more (+11.8%), saw their results improve sharply. In Eastern European countries, meanwhile, very good alternates with less good. Poland wins the prize for growth with a RevPAR up by 11.9% last September and pursues an increase in room revenue by 8.7% on twelve cumulated months thanks to an increase in average daily rates by 4.3% and an increase in occupancy rates by 2.3 points. In Hungary rates show a spectacular recovery last September (+18.1%) with a positive result: the RevPAR is on an uptrend (+10.1%) despite a drop in occupancy. On the other hand, the Czech Republic continues to bow down month after month. In September its RevPAR is even lower than that of its Hungarian neighbour (87.70 euros versus 88.00 euros).After a very good August, Belgium did not do a repeat performance of last September (-6.0%), nor did it repeat the previous year when the country posted record growth for its RevPAR (15.7%). Average daily rates remain down (-6.1%), particularly in Brussels, which hosted several salons last year. Belgian hotels may also have suffered from the absence of the Formula 1 Grand Prix Spa- Francorchamp on its calendar. The trend nonetheless remains in favour of Belgium on twelve cumulated months with a RevPAR up by 37%. Other countries with their morale at half-mast are those in Northern Europe. Sweden reported an 11.6% drop in performance and its Danish neighbour a 5.0% drop. In September, Scandinavian hoteliers implemented an aggressive rate policy (-11.6 % in Sweden) to sustain occupancy that remains stable with respect to last year.

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