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July 2016: Europe's hotel industry is on the fence

The disparities observed in recent months between European countries continue with significant evolutions in performances in certain states. Overall, growth has been timid but allows the continent to post results that are generally positive, thanks to the Iberian Peninsula, Poland and Greece in particular.

In Europe the Revenue per available room (RevPAR) experienced slight growth by 1.9% over July 2015. The occupancy rate is nonetheless down slightly (-0.8 points), but growth is driven by the average daily rate that is up 3.0%. Contrary to last month all categories post RevPARs that are up, generally through an increase in average daily rates that compensate for occupancy rates that are generally down, except for budget properties, which gained 0.6 points in their occupancy rate.



July 2016: Monthly results of hotel chains by category



July 2016 is following the trend that began in recent months, with major differences from one country to the next. During this summer season, certain markets stand out in particular: Poland, which posts a RevPAR up by 22.2%, Spain (+17.6%), Greece (+16.2%) and Portugal (+10.2%). On the Iberian Peninsula and in Greece, tourist arrivals continue to grow under the effect of their internal dynamics (improved economic context) and carryovers of visitors from Mediterranean destinations affected by terrorist attacks in recent months (Turkey, French Riviera, Egypt, Maghreb...). Italy, meanwhile, posts a slight drop in its RevPAR compared to summer 2015 when activity was sustained by Expo Milano and the Biennale di Venezia. No catastrophe followed "Brexit" in the United Kingdom: the RevPAR grew by 6.5% at a constant exchange rate (GBP/EUR 2016), which nonetheless does not make up for the strong drop in the pound sterling in recent weeks. Germany, meanwhile, is following a moderate growth trend: +1.1% of the RevPAR in July (but +4.6% since the beginning of the year).

This month Belgium has observed a new drop in its hotel performances, with a RevPAR down by 15.8% (meaning slight improvement over the previous month when the RevPAR was down 22.7%) due to an occupancy rate that was down (-10.9 point). France is following suit with a 6 point drop compared to last year. The context of insecurity that has pervaded these countries since the attacks continues to hurt tourist arrivals.

On the first 7 months of the year only France and Belgium posted a RevPAR down by 4.4% and 3.0% respectively compared to the same period in 2015. This situation may be attributed to the attacks that these two countries were subjected to in recent months and to the general context of insecurity that resulted from it. On the other hand Spain and Poland posted double digit-growth in their RevPAR by 15.0% and 11.8%. The Netherlands and Portugal are also under favorable auspices with RevPARs up by 9.1% and 8.4% respectively across the first 7 months of the year.

Markets throughout the European continent appear to be achieving stability on the first seven months of the year, with an occupancy rate that is steady and average daily rate and RevPAR up slightly, +1.3%.

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