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Stable business, but higher average rates

The revenue per available room rose sharply in October throughout Europe, resulting in double digit growth (+12.4%).This rise was made possible by a significant increase in average daily rates, while business remained stable with respect to last year.

As the months go on they tend to resemble one another throughout Europe. After a very good September with sharp growth (+ 5.2%) marked by the economic recovery, October produced even better results. The revenue per available room shot up even more to close the month with double-digit growth (+12.7%). The upscale category, which had fallen into step in September with standard results, picked up speed and is today in the lead with a growth by 15.1%. Another sign of good overall economic health, and a proof of the wide maneuvering margin for hoteliers, is average daily rates that alone succeed in boosting results (+14.9%). Meanwhile occupancy remained relatively stable with respect to last year (+ 0.2 point).Several European countries, while they don’t show double-digit growth can also rejoice this October. Italy, with + 8.6%, was boosted by its two northern cities Milan and Turin. Pulled along by average daily rates contrary to previous months, Belgium is not alone in this general movement (+7.0%) and produces good overall results from Liège to Antwerp and including Brussels. The seat of headquarters for many multinationals worldwide, the Netherlands fully benefit from the surrounding economic situation. The Netherlands’ economic indicators are in the green, with an unemployment rate of 5.2 % and forecasted growth by 3.5 % in 2006. Amsterdam, but also The Hague, the capital, or Rotterdam follow this positive trend. As a result the hotel business posts 8.0% growth for the RevPAR.The other categories share in this ambiance that is so cheering for Europe’s hoteliers. The 2* ( + 9.3%) and 3* ( + 9.9%) categories are also close to double-digit performance. They benefit from positioning well differentiated between the two segments. They gained in both areas: with an increase in rates by 5.3% and 6.3% – more moderate than the 4* – and parallel growth in their occupancy rates by 2.8 points and 2.3 points respectively. Hard budget hotels also show positive results on the same period. 0*, in particular, posts an increase in its RevPAR by 4.3% while 1* is up by 5.9%. Consequently growth for Europe’s hotels is 7.4% on twelve months due to the increase in occupancy (+ 1.4 point) and the growth in average daily rates (+ 5.3%).This favorable climate for hoteliers is practically omnipresent throughout Europe of 25. The noteworthy exception is the Czech Republic which remains well behind its continental counterparts (-7.4% in October and -13.4% on 12 months). Other countries that are relatively disappointed are those in Northern Europe where the revenue per available room progressed by 1% in both Denmark and Sweden. These results were achieved thanks to an accommodating rate policy – drops by more than 2% - in order to sustain occupancy rates. Results are checkered even if a city such as Stockholm has no shortage of appeal for Business clientele thanks to "many multinationals, and business specialized in new information technologies in particular," remarks Fredrik Utheim, Regional Managing Director of Rica Hotels.Inversely, Spain is victorious in October. Its RevPAR progressed impressively by more than 22% thanks to Barcelona and Valencia’s lively activity. The source of these results lies in very significant growth in average daily rates (+ 20.5%). This unusual performance may be explained by the evolution of the Spanish supply last year. Hotels that opened last year are now reaching cruising speed resulting in higher rates. Nonetheless, the increase in occupation (+ 1.3 points) offers hope for the future, although Madrid seems to be lagging behind the overall trend.With 12.1% growth, France is among the best performing countries this October. No clouds darken the skies for British hotels either (+ 14.9%). London affirms itself once again as the most dynamic city in Europe, whereas regional properties seem to be lagging behind the vigorous growth in the capital. Meanwhile, Germany keeps its momentum of the previous months with a RevPAR up by 15.1%. In addition to a propitious economy, the last positive effects of the Fifa World Cup could be felt in October. Thomas Keilbar, director of Ibis Köln City Messe Arena, remarks: "We benefit from business clientele who had to postpone travel because of this event". The 4* category thus offers a fine display of health with a RevPAR up by more than 20%. This overall result is to the credit of the major cities Berlin, Munich, Hamburg and Stuttgart.Several European countries, while they don’t show double-digit growth can also rejoice this October. Italy, with + 8.6%, was boosted by its two northern cities Milan and Turin. Pulled along by average daily rates contrary to previous months, Belgium is not alone in this general movement (+7.0%) and produces good overall results from Liège to Antwerp and including Brussels. The seat of headquarters for many multinationals worldwide, the Netherlands fully benefit from the surrounding economic situation. The Netherlands’ economic indicators are in the green, with an unemployment rate of 5.2 % and forecasted growth by 3.5 % in 2006. Amsterdam, but also The Hague, the capital, or Rotterdam follow this positive trend. As a result the hotel business posts 8.0% growth for the RevPAR.

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