Access the main content

Analyses

The year is off to a spectacular start

Europe’s hotel industry kicks off 2007 in the best way. The RevPAR at the end of February was up by 7.0% while January’s by + 10.8 %. These very good results are due to a strong increase in the average daily rate. Within this favorable context, Italy suffers a comparison with 2006, the year of the Olympics in Turin.

The year 2007 begins under favorable conditions for chain hotels in Europe. The first months of the year offer fine hopes for the months to come. In January revenue per available room grew by 10.8%. And February was no exception with renewed double-digit growth. The RevPAR at the end of the second month of the year was up by 7.0%. This first rate performance was realized thanks to a strong increase in rates. Boosted by average daily rates in the first month of the year (+ 8.1%), Europe’s hotel industry reproduced the same schema in February (+ 5.3%). European hoteliers have a real growth margin for rates. To their great pleasure, this growth went hand in hand with a steady occupancy rate (+ 1.0 point).Belgium and Austria posted results that were slightly lower than the European average with respective increases in their room revenue by 4.8% and 2.2%. In Eastern Europe, the Czech hotel business showed a fairly significant drop in its their performance in 2006 (–10.9% on twelve cumulated months) and seems to be slowly limiting this downward spin. February ended with a by close to 3% (-2.9%). But a favorable element follows: average daily rates for the Czech hotel industry ended January on an uptrend (+1.1%), a first in a long time. Neighboring Hungary, meanwhile, kept its shape last February (+7.0%). While its occupancy rate remains below 50% for this relatively weak month (45.6%), prices continue to climb (+15.6% on the last twelve months).The 4* category continues to drive European growth with its 10.5% over the last twelve months. In February the upmarket segment confirms its status as locomotive. Its revenue per available room grew by 6.6% while the occupancy rate remained stable from one year to the next. In this context, the midscale hotel industry is more comfortable. Month after month the positioning of the 3* segment became clearer and it achieved growth in its RevPAR by 6.7% thanks to average daily rates that oriented in the right direction (+ 4.5 %) and an occupancy rate that was up slightly (+ 1.2 pt). The economy hotel industry was also treated to an excellent month in February. The 2* category its results grow by 8.9%. Its two indicators are oriented upward: occupancy rate (+3/3 points) and average daily rate (+3.5%). With constant growth, hoteliers on the hard budget segment continue to enjoy a certain amount of latitude with regard to average daily rates. The 1* category in particular which adds new appeal to its maneuvering margin (occupancy +1.0 point). The result: the RevPAR for the category ends the month with a 6.2% increase. On twelve cumulated months, growth reached 4.0% for the 0* and 4.9% for 1*.Geographically, Germany appears to have made a transition by welcoming the FIFA World Cup. Previously known for lower performance than the European average, the Federal Republic profits fully from the “round ball” effect. The benefits of the event continue to affect the RevPAR in February (+5.6%). The German government evaluates the overall repercussions for the two years to come at 1.5 billion euros. Hoteliers are rejoicing over this favorable climate. While occupancy improves each month– and February is no exception with a 0.8 point increase – properties have mostly been able to cross a rate threshold, particularly those in the upscale category. Last month, the average global rate neared 90 euros (+ 4.2%), a goal that was surpassed in January with 91.3 euros (+8.7%).Inversely, the champion country of the soccer world felt the absence of such an event as the winter Olympics. Italy’s revenue per available room posted a clear drop (- 15.2%), with a simultaneous decrease in occupancy and average daily rates. February in Turin and, to a lesser extent in Milan and Rome suffered comparison with an exceptional 2006. The RevPAR in the host city had tempted and succeeded a triple Axel with 222% growth in its room revenue. The logical reverse of the medal: its RevPAR did a freefall in 2007 by nearly 70%.The country that is the most fit in these first months of 2007 is incontestably the Netherlands. To a January that was up by 16.6% may be added a second month in the year following a nearly identical schema with + 15.3% growth in the RevPAR. All Dutch cities are doing well: Amsterdam of course, but also Rotterdam, The Hague and Eindhoven. The United Kingdom follows closely behind as it begins another year on the cutting edge of Europe’s hotel industry (+9.8%). London tirelessly reports impressive growth in its average daily rate is relayed this month by Birmingham and Manchester. An outsider, Poland did better than just well. Demand on the rise and overcapacity in the capital of Warsaw reabsorbed contribute to making this country one of the best performing today with +15.5% growth.Behind this leading group, France posts results that are more than satisfactory with 9.3% growth, better than those in January (+5.9%). Spain is back in shape. After a January in keeping with mast year (+1.7%), the second month of the year was much better with a 7.6% increase. Like the European trend, Madrid and Barcelona both posted strong growth in their average daily rates while benefiting from an increase in occupancy.Belgium and Austria posted results that were slightly lower than the European average with respective increases in their room revenue by 4.8% and 2.2%. In Eastern Europe, the Czech hotel business showed a fairly significant drop in its their performance in 2006 (–10.9% on twelve cumulated months) and seems to be slowly limiting this downward spin. February ended with a by close to 3% (-2.9%). But a favorable element follows: average daily rates for the Czech hotel industry ended January on an uptrend (+1.1%), a first in a long time. Neighboring Hungary, meanwhile, kept its shape last February (+7.0%). While its occupancy rate remains below 50% for this relatively weak month (45.6%), prices continue to climb (+15.6% on the last twelve months).

This article was published over a month ago, and is now only available to our members.

Access all content and enjoy the benefits of subscription membership

and access the archives for more than a month following the article

Register

Already signed up?

Loading...

You have consulted 10 content. Go back home page or at the top of the page.

Access next article.

Sign up to add topics in favorite. Sign up to add categories in favorite. Sign up to add content in favorite. Register for free to vote for the application.

Already signed up? Already signed up? Already signed up? Already registered?