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Analyses

July 2021: the European hotel industry is back on track

The month of June saw the start of a recovery in hotel activity, and July confirmed it. The number of tourists in Europe increased across the continent.

Although the overall occupancy rate of European hotels remains down by -29.6 points compared to the pre-crisis period, it rose significantly between June and July 2021, gaining 11 points to reach 48.8%. The second month of July under the pandemic resulted in better results than last year’s: +16.2 points of occupancy rate compared to July 2020.

In terms of range, the super-economy and economy segments fared best, with occupancy rates declining by 15.7 and -26.2 points compared to the pre-crisis period. However, compared to last year when the mid-range and high-range segments were still heavily affected, this year they managed to regain 16.4 points and +19.5 points on their occupancy rate relative to July 2020, even if they are still far from the pre-COVID period, with, respectively, -30.8 and -38.3 points of occupancy rate compared to 2019.

On the price side, hotels have also resumed an upward dynamic: +13% compared to 2020, but still -11.2% compared to the pre-crisis period. Overall, European countries have thus recorded much more encouraging RevPAR developments in July than in June 2021 and, above all, much more favorable than last year.

The recovery is particularly driven by the Mediterranean countries, which have seen the arrival of the first holidaymakers. This is first and foremost the case for Greece, which has achieved the best results on the continent in July 2021: the country recorded the highest occupancy rate in Europe (59.8%, 24.8 points higher than the previous month) and thus managed to return to a level of RevPAR that was -26.8% lower than in July 2019. Its prices have returned to pre-COVID levels (+0.8% compared to July 2019).

Greece is followed by France, which recorded a slight decline in RevPAR to -30.7% in July, thanks in particular to an occupancy rate that has risen to almost 55%, and to a limited price decline of -3.8% relative to pre-COVID levels.

Spain recorded a decline of -44.7% compared to 2019, also marking a notable improvement, while Portugal (-67.6%) is struggling a little more to recover. Italy is at half its normal turnover (-50.7%) but is back on a more favorable trend in terms of occupancy (45.7% of occupancy rate, -34.4 points compared to 2019), while its prices are even more clearly below pre-crisis levels (-13.2%).

This dynamic is even more marked in the United Kingdom, where the occupancy rate rose to 55% in July (-30.9 points below 2019) but average prices are still down (-24.4%). On the Peninsula as well as on the British Isles, the absence of international customers with high purchasing power is still being felt. 

However, the United Kingdom, Spain and Italy are doing much better than in July 2020 with +203.3%, +160.8% and 155.3% respectively.

In Germany, Austria and Switzerland, the fall in prices is once again more contained, but the sharp drop in occupancy leads to a level of activity that is close to half of its normal for this period: -48.8% of RevPAR in Germany compared to July 2019, -52% in Austria, -55.4% in Switzerland.

Benelux suffers even more, due to its dependence on international customers, with RevPAR declines of -60.8% in Belgium (compared to 2019), -65.3% in the Netherlands and -59.3% in Luxembourg.

Finally, Hungary, the Czech Republic, Latvia and Portugal are still behind the recovery, with activity levels of less than 1/3 of the normal.

More generally, July was therefore quite good for European hoteliers but August will be determining. What will the tightening of health restrictions have on holidaymakers' choices?

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