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January 2020: European hoteliers on the upward slope

The European hotel industry is on the rise once again in January. Very few countries are losing market share in northern Europe, while RevPAR has made spectacular progress in the southern half of the continent.

All segments are progressing. First of all, occupancy shows the best growth over the last twelve months, thanks to a +1.4-point increase in occupancy to reach an occupancy rate (OR) of 59.5% for the whole Europe. Prices are advancing at a slower rate of +0.6%, resulting in an average daily rate (ADR) of €93.10 excluding VAT. RevPAR rose by +3.0% to €55.40 excluding VAT, slightly above the previous month's performance, when the increase was +2.4%.

Unlike in December 2019, as in France, it is mainly the Upscale alone that is driving the performance up. The OR rose by 1.8 points, while still posting the best result in absolute terms at 60.8%. It was the only segment to increase its ADR by 1.1% to €135.70 excluding VAT, leading to the only RevPAR growth above the regional average: +4.2%, for a revenue per room of €82.50 excluding VAT.

The Midscale and the Economy businesses have followed similar paths. They are each gaining slightly in occupancy, with +1.2 pt (OR 59.5%) and +1.3 pt (59.8%) respectively, while they are each lowering their average rates by precisely -1.0% (ADR €87.10 excl. VAT) and -0.2% (€69.60 excl. VAT). Their revenues per room are both between 1 and 2% growth: +1.1% for the Midscale (RevPAR €51.80 excl. VAT) and +2.0% for the Eco (€41.60 excl. VAT).

Finally, the Budget has stagnant OR and ADR. The former is evolving by +0.7 pt to reach an average of 56.0%, and the latter by +0.5% to reach €47.60 excluding VAT. RevPAR is in third place ahead of the Midscale segment, with +1.9% growth for a revenue of €26.70 excluding VAT per available room.

From a regional perspective, almost all countries are seeing an increase in performance. Four markets are achieving double-digit RevPAR growth. These are Greece (+11.8%), Austria (+16.0%), Portugal (+16.6%) and especially Hungary (+25.3%). The last three countries mentioned were already in the top performing markets last months, indicating an upward trend on the long run.

The record of the month once again awarded to Hungary for the second month in a row comes from a growth in all indicators, each beating the month's record, whether for occupancy (+6.2 pts) or ADR (+11.6%). In absolute terms, OR is only up to the level of that of other destinations, at 56.8%, just as it is for ADR, which stands at €67.00 excluding VAT, which is still far from the European average, estimated at €93.10 excluding VAT. The results are particularly driven upwards by the capital, Budapest, which posted a RevPAR up +26.6%.

As regards to Portugal, the situation is very similar: an OR pushed up by +5.0 pts to reach 57.2%, an ADR up by +6.4% for €70.90 excluding VAT and a RevPAR up by +16.6% to €40.60 excluding VAT. The various regions and cities are driving growth, even if the Algarve region is slightly more impressive than its neighbours: +12.8 pts of OR (50.7%), +21.7% of ADR (€69.70 excl. VAT) and above all +62.5% of RevPAR (€35.40 excl. VAT).

Second this month, Austria has been a real success story over the last twelve months. Indeed, the destination is constantly growing in terms of attractiveness and attendance (for more information, read the report on overtourism in Austria), so that it is a big winner in European tourism. This month, it scored 4.2 additional points for an OR of 62.1%. Its prices are also on the rise (+8.2%) - the second highest increase in ADR this month - averaging €88.10 excluding VAT. Once again, it is mainly the capital city, Vienna, that is driving national growth, posting a RevPAR up by +18.4%, unlike Salzburg, which is on the contrary declining (RevPAR -4.4%).

Finally, Greece is recovering after a rather stable December. The Mediterranean destination boosted its OR by +3.2 pts (49.1%) - the highest increase in OR over the last twelve months for the country - and its ADR by +4.5% (€103.50 excl. VAT), so that it managed to obtain a RevPAR up by +11.8% (€50.80 excl. VAT).

Alongside these strong growth rates are several markets with a rather average growth rate between 5 and 10% of RevPAR. There is Latvia (RevPAR +8.9%), which had previously experienced rather difficult months, but also Italy (+8.0%), Poland (+7.7%), Belgium (+6.1%), the Czech Republic (+5.6%) and France (+5.5%). This is mainly due to an increase in occupancy, between 1 and 3 points. Average rates, on the other hand, have only increased slightly.

Five destinations have stable revenue per available room: Spain (+3.2%), the United Kingdom (+1.8%), Luxembourg (+1.1%), Switzerland (+0.4%) and the Netherlands (+0.3%). These are markets that did not win any market shares nor even lost any one, unless the Netherlands, which saw a 0.3 point drop in occupancy (to 62.1%) - slightly offset by a neutral ADR up +0.7% (to €97.30 excluding VAT) for a stable RevPAR of €60.50 excluding VAT.

After three consecutive months of growth, Germany is in the red in January. The country's RevPAR (€54.30 excluding VAT) was down 2.9%, with both a 0.1-point loss of occupancy (to 59.4%) and a 2.8% drop in ADR (to €94.00 excluding VAT). Several cities, notably major markets such as Munich (RevPAR -25.6%) or Frankfurt (-6.8%), are pulling national performance down due to losses in occupancy compared to January 2019.

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