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January 2018: Europe's hotel industry is off to a good start

After a fully satisfactory year for the European hotel industry, the challenge is to maintain this momentum. As Bulgaria takes over the rotating Presidency of the Council of the EU, the industry seems to be right on track considering results thus far into the year.

2017 closed with a 6.7% increase in RevPAR in November, followed by a 7.0% increase in December. Good performance continued into 2018 with a RevPAR up +4.7%. Overall, this increase in RevPAR was due to both an occupancy rate up +1.5 points from 57.0% in January 2017 to 58.5% in January 2018 and average daily rates up +1.8% from 51.0% to 53.3 euros.

Growth is evident on all segments: the Budget segment posted a 5.5% increase in RevPAR, thanks to a 1.5 point increase in occupancy rate and average daily rates up 2.7%. The mid- and high-end categories also improved, with gains of +5.6% and +4.4% in RevPAR, respectively. Both benefit from higher occupancy rates and higher average daily rates than in January 2017. The economy segment is advancing slowly but surely with a RevPAR up +2.7% due to a 0.9 point increase in occupancy rate and +1.1% increase in average daily rates.

Most European countries continue to build on the momentum begun in 2017 and show promising performances.

Latvia is stealing the show with a RevPAR up +28.2% due to an occupancy rate up +9.4 percentage points from 46.0% in January 2017 to 55.4% in January 2018, and average daily rates up +6.4% from 58.4 euros to 62.2 euros.

With a double-digit increase in RevPAR (+10.9%), Belgium experienced a more favorable January in 2018 than 2017 when the country reported a negative RevPAR of -3.2%. The territory thus seems to have turned the page on the attacks that hit its capital. Belgium’s Dutch neighbor, meanwhile, experienced increases in both its occupancy rate (+3.2 points) and average daily rates (+3.5%), resulting in a 9.0% growth in RevPAR.

Southern European countries are also in good shape, such as Spain (+8.4%), Italy (+7.1%), Portugal (+5.5%) and Greece (+5.6%), with good performances in RevPAR. Figures for Spain and Italy are due to an increase in both average prices and occupancy rates. Results for Greece and Portugal are largely due to an increase in average daily rates. Eastern Europe was boosted by the increase in Poland's RevPAR (+8.7%) due in particular to an increase in occupancy rate by 3.4 percentage points, followed by Hungary (+7.7%) which achieved growth more through the increase in average daily rates (+4.7%). In Western Europe, growth in Germany's RevPAR (+3.7%) resulted from an increase in occupancy rate by +2.2 percentage points while the RevPAR in the United Kingdom increased (+0.9%) thanks to just a slight increase in average daily rates (+1.0%). With a 3.9% increase in its RevPAR, France keeps step with the good momentum of the European continent and should continue to follow this trend.


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