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Summer kicked off to a spectacular start for Europe’s hotel industry

The summer season started under good auspices. The RevPAR rose throughout the Union by 12.3% with respect to July 2005. Occupancy rates improved by 2.8 points to reach 71.5%. At the same time average daily rates rose by 7.9%. While all categories reported uptrends, growth in the RevPAR is increasingly flagrant as we rise in category: +3.9% in 0* to 15.5% in 4*.

The very good results reported in France (RevPAR up by 10.2%) were part of a trend that benefited the entire European Union. With exception to the Czech Republic, where Prague’s hotels suffered from competition with other Eastern European capitals, all the countries studied saw their revenue per available room on an uptrend. Germany, of course, saw its results clearly stimulated by the FiFA World Cup and accounts for a great deal in the end results. Its RevPAR rose by 35%. But results were remarkable even elsewhere: Hungary, Belgium and Denmark stand out in particular with respective growth in their RevPARs by +15.9%, +13.7% and +16,6%. The causes of this success vary from country to country. Destinations such as Hungary and Poland owe their growth only to average daily rates that veritably soared while occu pancy rates followed a downtrend. But elsewhere nonetheless, occupancy rates and average daily rates increased in concert, revealing steady activity.Further North in Europe, the United Kingdom posted one of the most spectacular increases that month with +11.6% for the RevPar. These results are excellent and cannot be attributed to the terrorist attacks in London in July 2005. In fact, July 2005 closed with a mere 1.9% drop in the RevPAR. “Like most London luxury hotels, the Mandarin Oriental Hyde Park had a very fine summer,” confirms Liam Lambert, COO of the brand for Europe. "The increasingly evident growth in the numbers of certain emerging clientele such as Russians also plays a role in this. As does the increase in arrivals of American tourists, our primary clientele, and the lengthening of stays of our clients from the Middle East.” The foiled terrorist plot this summer that intended to explode airplanes flying between England and the United States could have revived the psychosis and put an end to this growth, but according to Liam Lambert nothing came of it: “Unfortunately, we must all learn to live with terrorism. And the fact that the authorities were able to prevent the attacks seems to have reassured many travellers about the security of our country.” July 2006 closes with a remarkable average occupancy rate of more than 81% throughout the country! Throughout Europe, July thus marked, as in France, a reinforcement of the uptrend that began at the beginning of the year. At the end of July the RevPAR on 12 months was on an uptrend in most countries. The improvement of economic conditions, with France and Germany acting like engines for the entire zone particularly in the second semester, stimulates activity for hotels and opens the way to encouraging perspectives for the end of the year.“The month was exceptional for us,” confirms Lucia Garau, Sales & Marketing director of the hotel Il Pellicano and of the Relais & Chateaux La Posta Vecchia, both of which are located north of Rome. “This is greatly due to the fact that Italy is currently the n°1 destination for the American Leisure market. From a local point of view we also benefit from the success of cruise sales and the proximity of the port of Civitavecchia.” Still in the south of the continent, Spain also started summer well. “I think our good results come first from the intensification of leisure tourism in Madrid,” explains José Martinez, revenue manager at Silken Puerta America. “But it must also be remembered that people don’t all leave on vacation en masse during the peak season anymore. This is why from year to year the first 15 days of July are less and less considered the slow season for the business segment. Demand is now just as strong then as in March or April...” Occupancy rates are up by 3.5 points and average daily rates are also on an uptrend: +2.0%. On 12 months, the RevPAR progressed by 3.1%. Spanish hotels are turning over a new leaf after a very difficult period due to strong development in supply.Further North in Europe, the United Kingdom posted one of the most spectacular increases that month with +11.6% for the RevPar. These results are excellent and cannot be attributed to the terrorist attacks in London in July 2005. In fact, July 2005 closed with a mere 1.9% drop in the RevPAR. “Like most London luxury hotels, the Mandarin Oriental Hyde Park had a very fine summer,” confirms Liam Lambert, COO of the brand for Europe. "The increasingly evident growth in the numbers of certain emerging clientele such as Russians also plays a role in this. As does the increase in arrivals of American tourists, our primary clientele, and the lengthening of stays of our clients from the Middle East.” The foiled terrorist plot this summer that intended to explode airplanes flying between England and the United States could have revived the psychosis and put an end to this growth, but according to Liam Lambert nothing came of it: “Unfortunately, we must all learn to live with terrorism. And the fact that the authorities were able to prevent the attacks seems to have reassured many travellers about the security of our country.” July 2006 closes with a remarkable average occupancy rate of more than 81% throughout the country! Throughout Europe, July thus marked, as in France, a reinforcement of the uptrend that began at the beginning of the year. At the end of July the RevPAR on 12 months was on an uptrend in most countries. The improvement of economic conditions, with France and Germany acting like engines for the entire zone particularly in the second semester, stimulates activity for hotels and opens the way to encouraging perspectives for the end of the year.

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