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March 2018: wide trend gaps in hotel business between European countries

This month, all indexes were green for the hotel industry in western and southern Europe. Instead, Germany, Luxembourg, Austria and Poland show slight slumps in the RevPAR, primarily due to the different Easter vacation calendar in Germany.

European hotels had signed +4.7% growth in the RevPAR in January, then +5.5% the following month. In March, the dynamic remains positive at +3.4%. This growth may be better explained by the +2.6% price inflation bringing it from 90.9 to 93.2 euros excl. VAT, than by the 0.6 point increase in occupancy rate rate from 69.0% to 69.6%.

The month of March was much more favorable to the budget segment that reports growth in the RevPAR by +7.9% thanks to an occupancy rate up by +1.9 points and average daily rates up by +4.9%. The other categories - economy, midscale and upscale follow a common trend with a slight increase in occupancy rate and moderate growth in average daily rates.

Europe's hotel industry produced heterogeneous results, although overall results for March were positive on the whole. Germany, Luxembourg and Austria showed signs of weakness this month with -4.2%, -3.9% and -1.8% respectively in their RevPAR. Poland also posts negative results with -0.8%. In all these countries, the occupancy rate is down, by -5.4 points in Luxembourg and at least one point in Germany, Austria and Poland. In terms of prices, Germany is the only country in the European Union where prices were down, by -1.7%, on the month. This trend was largely due to the Easter calendar that shifted in Germany with its traditional impact on German clientele and the hotel markets that depend on it, it should then be offset by a rebound in April.

In the lead in March may be found Belgium, with +5.3% RevPAR, Spain with +5.2% and Italy with +8.5%. Their dynamism is primarily due to change in average daily rates. The Czech Republic, with +4.9% in its RevPAR gets its growth primarily from a leap in occupancy rates (+2.5 points) while the change in France's RevPAR (+6.8%) may be explained by a combined increase of the two indexes.

Impressive growth in the RevPAR can be observed in 5 countries that stand out this month: the Netherlands (+14.8%), Portugal (+18.3%), Latvia (+19.4%), Hungary (+19.4%) and Greece (+20.1%). The Netherlands, Portugal and Hungary post strong increases in prices by +10.4%, +15.6% and +15.8% respectively. In Latvia, the occupancy rate leaped +9 points while average daily rates hardly moved. In Greece, growth is a combined effort: +5.8 points in occupancy rate and +9.8% for average daily rates. Overall, the markets of so-called "peripheral"countries continued along their trajectory, while Germany and its associated markets came to a halt.

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