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July 2018: Europe's hotels show timid growth

After a month of June marked by improved hotel results (+6.7%), Europe's summer shows less significant growth. Driven by essentially positive results in Belgium, the Netherlands and Latvia, there are nonetheless disparities with drops in results in Switzerland and Poland.

Compared with July 2017, hotels on the continent recorded a slight 0.9 point increase in occupancy to 78.5%. The same movement was observed for average daily rates, which rose by 3.9% to 102.9 euros. The progression of these two indicators resulted in overall growth by 5.1% in RevPAR, which reached 80.6 euros.

While the positive trend may be observed in all categories, the high-end hotel sector leads the way with a RevPAR up 11.6%. The other segments maintained good growth in RevPAR by 8.4% in the midscale segment and by 6.9% in the economy segment. The increase in the average daily rate alone by +5.1% compensates for the decline in the occupancy rate of the budget segment (-1.5 points), which posted a RevPAR of 3.0%.

 

At year-to-date, the balance sheet is also favourable with all indicators green. This general dynamic is maintained by the upturn in activity in practically all countries.

Major Western European countries maintained a steady pace with France (+8.7%), the United Kingdom (+5.0%) and Germany (+0.1%), while growth peaks by more than 10% in RevPAR were recorded in Belgium (15.9%) and the Netherlands (11.3%).

In Southern Europe, Italy (+4.7%) continued to shine, Spain (+0.2%) benefited from the success of Madrid  (RevPAR +10.8%) and Valencia (RevPAR +10.7%), while Barcelona's RevPAR fell by -5.6% and Portugal (+6.9%) built on the good results of previous years. The improvement in Greek activity (+8.3%) is reflected in an increase in average daily rates by more than 10%, to reach a RevPAR of 11.6% year-to-date.

Two countries are the exception owing to less intense activity in July: Switzerland (-1.9%) and Poland (-4.1%). In 2017, Hungary posted its strongest RevPAR growth since 2016 (+28.8%), thanks in particular to the World Swimming Championships held in Budapest. At the start of the summer, average daily rates fell by 8.2% but the occupancy rate was more moderate than the previous year (-0.8 point) nonetheless reached 84.1%. This table is completed by Latvia (+11.0%), Austria (+6.6%) and the Czech Republic (+3.8%) which also sign occupancy rates higher than 80%.

Despite lower occupancy rates than in July 2017, Europe's good results illustrate a good start to the summer season. Over the last twelve months, European RevPAR was up 4.8% thanks to a 2.9% increase in average prices.

Overall, the European hotel business performed well in July: most countries saw their RevPAR grow compared to last year and some can even boast double-digit growth. The Benelux region and France are pursuing their growth paths, while the usual growth leaders (Spain, Portugal, Greece) continue to progress.

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