Europe is treading water in February. In fact, performance is very mixed from one market to another, with the result that the European hotel industry has a rather neutral balance sheet on the scale of all the markets. Indeed, half of the countries have a RevPAR growth rate of between +0 and +6%, with even one exception, namely a market with a double-digit RevPAR growth rate. The other half of the continent is experiencing the first effects of the Covid-19 Coronavirus crisis in Europe.

Under these exceptional circumstances, Hospitality ON and its partner OK-Destinations make the hotel performance statistics available for free access so that you can follow the news and keep updated in the best possible way.

After a first month of the year on the upward slope, Europe is stagnating in February. The occupancy rate (OR) fell slightly by 0.7 points to 63.4%, while the average daily rate (ADR) remained stable at €93.90 excluding VAT (+0.9%) for a neutral revenue per available room (RevPAR) of -0.2%, i.e. €59.60 excluding VAT.

All segments have declining occupancy. The Budget is down -0.1 pt (OR 61.1%), the Economy -0.2 pt (64.4% - best OR of all segments), the Midscale -0.7 pt (63.6%), and the Upscale -1.4 pt (63.6%).

Hoteliers are trying to curb this customer drop by raising their rates so that most of the ADRs are growing except for the Economy which is maintaining its ADR at 70.40€ (-0.1%,). On the other hand, the Budget is experiencing the highest increase in ADR, up +2.1% to €48.60 excluding VAT. The top of the range has seen the second-best increase in ADR at +1.8%, to reach €139.20 excluding VAT. Finally, the Midscale segment's ADR rose by 0.9% to €88.60 excluding VAT.

Despite this, most segments had a slightly lower RevPAR, except for the Budget, which, thanks to the best increase in ADR, managed to achieve a RevPAR growth of +1.9% (€29.70 excluding VAT). As a result, the Eco segment lost -0.4% of RevPAR to fall back to €45.30, the Midscale -0.2% for €56.80 excluding VAT and the Upscale -0.4% for €88.60 excluding VAT.

The first half of the performance is mainly in Eastern Europe, with the exception of Portugal and France, which are still spared by the start of the international health crisis that will begin at the end of the month on the continent.

Germany opens the list of growth markets, even if it is rather neutral (RevPAR +0.1%), it nevertheless shows a return to positive growth after a month of decline, thanks to a slight increase in the ADR at the national level (+1.2%), while occupancy fell slightly (-0.7 pt, OR 65.0%). Most German cities regained market share and consequently raised their rates, particularly those very much in demand from business customers such as Düsseldorf (RevPAR +43.4%) or Cologne (+26.3%), alongside others rather weakened by the crisis that is beginning to impact the financial markets, with the result that the country's financial capital, Frankfurt, lost -10.2% of its turnover in February.

Its neighbour, Poland, also held steady, with an OR of 62.4% (+0.1 pt) and a RevPAR growth of +0.3%. This neutral trend reflects the variation in results between cities, with RevPAR growth ranging from -9.7% for Gdansk to +14.8% for Krakow. The capital is nevertheless in decline (-7.3%) due to a strong decline in its ADR (-6.5%), reflecting a drop in occupancy (-0.5 pt).

Austria, for its part, is slowing its growth after a double-digit RevPAR increase in January. Revenue per room rose by 2.5% to €59.20 excluding VAT, a trend mainly driven by occupancy, which gained 1.4 points to 62.3%, while the ADR stagnated at +0.2%.

France also slows down but manages to keep up. Occupancy stabilized at 59.6%, up +0.3 points at the national level. The average rate rose slightly (+2.4%) to €88.50 excluding VAT, leading to a small increase in turnover, up +2.9%, to reach a RevPAR of €52.70 excluding VAT.

Portugal and Switzerland progressed at the same pace (+3.8%). The country on the Iberian Peninsula managed to achieve growth thanks to a ADR up +4.1% to €68.80 excluding VAT, with a leverage effect to offset losses in the number of rooms, which fell by 0.1 point (OR 60.9%). Swiss hoteliers employed the same strategy in February, with a +7.8% increase in rates, while the OR fell by 2.3 points to below the 60% occupied room mark (59.6%).

Latvia (+5.3%) continues to observe a return of its activity after several months of regression in 2019, notably in December but especially last November. Its capital Riga is welcoming new customers, so that its OR is up to 49.9% (+3.8 pts), unlike its ADR, which is regressing (-2.8%), leading to an increase in revenue per room of +5.3%, rising to €26.80 excluding VAT, the lowest of the entire panel.

Finally, Hungary remains unshakeable, continuing its meteoric rise thanks to a RevPAR surge of +18.5%. Its capital, which is driving growth, even achieved +20.3% growth in revenue per room, thanks to a +4.1 pts increase in occupancy, which is thus close to the European level, with a OR of 60.6% (60.8% nationally), and ADR of +12.1% - even +13.9% for the entire country.

Alongside this first half of growth are the declining markets, mainly on the western and southwestern side of Europe, with the exception of the Czech Republic, which is also experiencing the strongest recession. This decline in activity is mainly attributed to a customer decline, especially leisure customers who are beginning to limit their travel due to the onset of the growing epidemic in February.

To begin with, the entire Benelux region is in decline. Belgium is losing a little in occupancy (-0.8 pt), which remains quite high compared to other markets (68.2%), as is the case in the Netherlands (-0.8 pt, OR 68.5%) and Luxembourg (-3.4 pts, OR 67.9%). The performance levels are thus similar in all respects, so that both Belgium and Luxembourg have a RevPAR down -2.4%, while the Dutch RevPAR is down -1.7%.

Next is the United Kingdom, which is also seeing a -2.4% drop in income per room, while it managed to hold its own in January, the last as a member of the European Union. The enactment of Brexit in the night of 31 January to 1 February 2020 inaugurated a new period, equally fraught with uncertainty as to the development of negotiations with the EU. All the major British cities are feeling the repercussions of this change, with a fall in occupancy observed in all markets: London (OR -1.5 pt), Glasgow (-1.5 pt), Edinburgh (-3.1 pt) and Manchester (-1.9 pt). Overall, occupancy of the national supply fell to 72.4%, a result that nevertheless remains the best in absolute figures on the European continent.

Furthermore, Southern Europe is the region most affected this month. The three Mediterranean markets are indeed on the same dynamic of declining sales, which inevitably leads to a drop in turnover.

In ascending order, Spain comes first. The country experienced the first disturbances in February with the quarantine of a 467-room hotel in the Canary Islands, following the detection of a case of Coronavirus in the hotel. Reservations were initially suspended until mid-March. At the national level, this first movement of cancellations resulted in a loss of -0.8 of occupancy for a rate that fell to 67.3%. On a regional scale, demand is fairly unequally distributed, with some markets falling, such as Barcelona (OR -11.1 pts, RevPAR -23.0%) while others are growing spectacularly, such as Alicante (OR +8.2 pts, RevPAR +18.9%) or Palma De Mallorca (OR +8.8 pts, RevPAR +17.7%). Overall, however, the Spanish hotel industry was unable to maintain its revenue per room, which fell by 1.5%.

Greece, the second most affected Mediterranean country, reported a 7.2% decline in RevPAR. Indeed, hoteliers are selling significantly fewer rooms than in February 2019, so that the OR loses -3.1 points to fall back to 55.7%. Athens is badly hit, with a fall in OR of -4.6 points (51.2%) whilst the port city of Thessalonica is managing to stabilise with 61.9% of its rooms occupied (OR +0.0 pt). The destination is thus suffering the first repercussions of the limitation of journeys to Europe, whilst the first cases of Covid-19 are only declared at the end of the month. For a more detailed analysis of the impact of the Covid-19 type Coronavirus on Greek tourism, see this article.

But it is above all Italy that is feeling the first shocks of the crisis, as the epicentre of the epidemic on European soil. The first cases discovered on 21 February in Lombardy and Veneto have led to a chain reaction, from the shortening of the Venice Carnival period (shortened by two days), followed by the quarantine of 11 cities until the total containment of the destination in mid-March. This rapid escalation of events resulted in a loss of -8.2 occupancy points, leading to an OR of 56.7% for the whole month, while the loss of tourists was only observed in the last week of February. The average daily rate nevertheless remains at +0.8% but does not prevent the RevPAR from falling by -11.9%. Cities in the North are naturally more affected than others: Milan (RevPAR -15.9%), Turin (-19.0%) and Bologna (-21.6%). Venice manages to balance the month with a smaller fall, thanks to the positive impact of the Carnival in the first half of the month, so that RevPAR is down only -5.5%. For its part, the Italian capital was not spared this overall decline in activity (RevPAR -10.3%). Only the south managed to maintain its revenue growth, with Naples +2.7% RevPAR.

Finally, the strongest recession was nevertheless encountered in the Czech Republic. Prague, which is pulling down results, lost part of its customer base in February, by 4.7 points of OR (56.3%). Faced with this increasingly anxious context, hoteliers preferred to lower their prices (-6.8%), which led to the biggest drop in revenue per room of the entire survey, with a 14.0% drop in RevPAR.