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March 2020: European Tourism is at a standstill

Forbidden gatherings, lockdown, border closures, closure of shops outside of basic necessities stores, European countries have gradually entered into a torpor in an attempt to stem the Covid 19 pandemic.

The hotel sector was directly affected, with some countries losing over 90% of their RevPAR. Although the entry into containment was gradual, ranging from 8 March in Italy to 23 March in the United Kingdom and Greece, the effect of the border closures was felt immediately. On a monthly basis, Europe lost -66.1% on RevPAR to reach €22.5 excluding VAT. It is the upscale segment that loses the most revenue with a -71.3% drop in RevPAR. Premium properties generated RevPAR of €29.1 excluding VAT, compared with €101.5 excluding VAT in March 2019. Occupancy fell by 49.2 points to 20.8%.
Midscale hotels lost 45.5 points of OR (23.7% occupancy). Although prices were maintained at +2.6%, RevPAR was down 64.8% to €22.3 excluding VAT.
Economy hotels lost 60.8% of RevPAR (€19.8 excluding VAT). Despite average prices up +2.9%, OR pulls performance downwards with a -43.4 point drop (26.7%).
The budget segment saw the smallest drop in performance, with a TO of -36.4 points for RevPAR, which fell by -55.3% to €14.3 excluding VAT.

Year to date (YTD from January 1 to March 31), results are also in the red with a decline in RevPAR of -24.2% overall, -19.9% for the budget, -22.8% for the economy, -24.3% for the midscale and -25.7% for the upscale.  Revenue performance per available room plunges from €60.1 excluding VAT at YTD 2019 to €45.5 excluding VAT at YTD 2020.

The decline is spectacular in all destinations. However, the more or less restrictive periods of entry into containment and the means deployed to manage the crisis are leading to differences in performance in March 2020.

The United Kingdom, which entered confinement late after having opted for collective immunity, lost 56.8% of RevPAR (£33.3 excluding VAT), making it one of the few countries in the panel not to fall below €30 excluding VAT in revenue per room. The destination maintains an occupancy rate of 35.2%, a loss of 40.6 points.

Germany has approached the crisis from a particular angle favouring prevention and relying on the civic-mindedness of its citizens. The impact on its activity has therefore been less marked than some of its European neighbours. German hoteliers lost -45.4 points in occupancy to reach 24.7%, leading to a drop in RevPAR of -62.9% or €25 excluding VAT for open properties.

Although Latvia has the third lowest RevPAR loss, -63.5%, its absolute base values are very low with a RevPAR of €11.1 excluding VAT compared to €30.5 excluding VAT in March 2019. Along with Greece (15.2%), the Czech Republic (15.5%) and Italy - the first European country to enter the crisis - (6.8%), Latvia has the lowest ORs. In March 2020, Greece had a RevPAR of €14.10 excluding VAT, the Czech Republic €9.5 excluding VAT and Italy €5.5 excluding VAT.

Luxembourg and Switzerland maintain a RevPAR above €30 excluding VAT per available room, with €33.7 excluding VAT and €33.6 excluding VAT respectively. Their occupancy rates are 27.3% and 22%.

Belgium, The Netherlands (which refuses containment) and Austria range from €22.5 excluding VAT for Austria to €26.7 excluding VAT for RevPAR in Belgium. The ORs are 23.1%, 25.1% and 19.7% respectively.

France, Spain, Portugal, Hungary and Poland are all between €10 and €20 of RevPAR. 19.8 for France, €19.7 for Spain, €16.9 for Portugal, €13.8 for Hungary and €12.9 for Poland.

All European hotel properties are in turmoil, with various support measures depending on the country.

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