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November 2017: The recovery continues for Europe’s hotel industry

For several months now, the hotel business has been progressing well in most of Europe and continues along its trajectory at the end of 2017, a year that also began well.

After a promising month of September with a RevPAR up by +5.8%, which growth continued in October with a RevPAR of +4.7%, the month of November confirms the trend remarkably with an increase in the RevPAR by +6.7%.

This result may be explained by a more significant increase in occupancy rate, or 2.3 points more than in November 2016 and even 1.1 point more than in October 2017. The growth in average daily rates remains pretty much the same with prices up +3.2% (versus +3.1% last October).

In terms of occupancy, the budget hotel segment increased significantly once again by 3.7 points, although the 67.4% occupancy rate in November 2017 remains lower than on other segments. The increase in occupancy rate is real, but weakens with the rise in range. The economy and midscale segments each post occupancy rates of more than 71% with identical growth by +2.3%. The upscale category produced the weakest growth across all segments, but nonetheless has the highest occupancy rate (71.9%).

As for the price dynamic, growth is most significant on the upscale and midscale segments where average daily rates grew by +3.9% and +4.0% respectively. The economy category posts half as much growth: 2.1%.

These dynamics include satisfactory RevPARs on each category and in particular on the budget segment with a RevPAR up by 9.9%.

This growth is experienced in many European countries. Only Latvia has a RevPAR that is down (-1.2%) due to a drop in average daily rates by 6.9%. The RevPARs for Germany and Austria are stable, with growth by +0.9% and 0.0%, respectively.

Following the terrorist attacks in Belgium in 2016, the country recovered with an occupancy rate up by 5.2 points and average daily rates up by 5.1%, resulting in double-digit growth in the RevPAR (12.8%). France is the country in the European Union with the strongest growth in occupancy rate (+4.8 pts). Western Europe has the strongest concentration of the highest occupancy rates with the United Kingdom (80.1%), Luxembourg (79.6%), the Netherlands (78.1%) and Belgium (75.7%). The United Kingdom, Germany and Greece nonetheless filled their hotels less than the previous year.

Countries in Eastern and Southern Europe post generally strong growth in their RevPAR such as Spain (10.3%), Portugal (13%), Poland (11.9%), Hungary (14.3%), Greece (8.1%) and the Czech Republic (9.9%). These countries all experienced a significant increase in average daily rates: Spain (6.9%), Portugal (8%), Poland (5.8%), Hungary (13.2%), Greece (8.1%), and Czech Republic (5.9%). It should be noted that in terms of results, Spain remains attractive despite current socio-political tension that penalized Barcelona, where the RevPAR has been down for several weeks.

The month of November 2017 is characterized by positive results for most European countries and offers hope as we move into the new year.

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