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April 2018: the business supply in full expansion in Europe’s hotel industry

For the fourth consecutive month, the European hotel business recorded an increase in RevPar compared to the same period last year: +5.3% in April, after 3.4% increase in March and 5.5% in February.

This growth is mainly explained by prices, which rose sharply (+4.5% on average), from 92.3€ to 96.4€, while the occupancy rate increased slightly (+0.6 point), even decreasing for budget hotels (-0.5 point).

The midscale segment benefited the most in April, with a 7.4% increase in RevPAR, thanks in particular to a 1.3 point increase in occupancy rate, while the upscale segment recorded the smallest increase (+4.1%), however results remained very positive. The lower growth in occupancy rates for the other segments explains their more modest performances.

Despite overall positive results, the European hotel industry posted mixed performances in April. Austria posted a 5.8% decline in RevPAR, the largest decline in the Union, while Greece, Spain and the United Kingdom were also down on the previous year (-2.5%, -1% and -0.5% respectively). Austrian performance was negative at all levels, with the average daily rate falling by 5.3% and occupancy rate falling by 0.4 points. The occupancy rate fell by 5.3 points in Greece and the rest of the Mediterranean region (-2 points in Portugal, -1.2 points in Spain), which can be explained by the calendar shift of the Easter holidays, with customer peaks recorded in March. Spain also saw the Holy Week held in late March, explaining the difference between the years 2017 and 2018.

Belgium and Germany are the growth drivers in terms of RevPAR, with growth above 12% and performances up in both occupancy (+3.3 and +2.8 points) and average daily rates (+7.6% and +7.4%), followed by Latvia and Luxembourg (+10.1% and +9.9% of RevPAR). In particular, business destinations are in better shape than the previous year over the same period, a trend explained by holidays in March instead of April: leisure customers having returned from holidays, business tourism is driving RevPAR up in business destinations.

France has again seen a strong increase in its RevPAR, +7.1% compared to last year, boosted by an average daily rate 6.8% higher, reaching almost €90 excluding tax. Every month since the beginning of the year, the country has outperformed 2017. In view of the events of May (multiple bank holidays, strikes, Paris attack), we can wonder about the durability of these positive performances.

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