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Trends

October 2020: all lights are red in Europe

The month of October confirms the intensification of the European hotel sector’ relapse into negative territory. As the second epidemic wave shook the continent, most countries resumed strict sanitary measures, ringing the alarm over the market.

Throughout, the occupancy rate fell to 30.1% on average (-46.6 points). Accompanied by a 28.8% drop in the average daily rate (€73.5 excluding taxes), this confirms the decline in RevPAR, down 72% this month (€22.1 excluding taxes). 

Very heavily impacted since the beginning of the crisis, the mid- and high-end segments once again recorded the biggest losses, with occupancy rates declining by 48.1 points (to 28.5%) and 58.6 points (to 22.2%) respectively, and average daily rate falling by 23.8% (€76.1 excluding taxes) and 27.3% (€144.4 excluding taxes) respectively. RevPARs in these two segments are therefore severely penalized, dropping by 71.6% for the mid-range (€21.7 excluding taxes) and 79.5% for the high-end (€25.4 excluding taxes). 

The economy and budget segments remain the most resilient, but with an occupancy rate still down by 44 points (33.2%) and 29.2 points (42.6%) respectively, and an average daily rate down by 19.2% (€62.7 excluding taxes) and 12.6% (€45.7 excluding taxes) respectively. The RevPAR therefore "only" loses 65.2% (€20.8 excluding taxes) for the economy segment and 48.2% (€19.5 excluding taxes) for the budget segment. 

 

However, some countries can rely on their domestic markets and resilient domestic demand to buffer the fall. Among them, France and Germany recorded less severe declines than their neighbors, with an occupancy rate down 35.9 points (36.4%) and 45.4 points (31.3%), respectively, and a RevPAR down 62.7% (€25.8 excluding taxes) and 69.4% (€24.4 excluding taxes), respectively. 

On the other hand, other countries were extremely affected by the lack of international customers, particularly Malta (-71.6 pts. of TO / -87.7% of RevPAR), Spain (-59.9 pts. of TO / -84.5% of RevPAR) and Belgium (-63.7 pts. of TO / -84.3%) which recorded the strongest declines. 

It should be noted that Greece fared better than the other Mediterranean countries, with one of the most moderate declines in Europe over the month of October, both in terms of occupancy rate (-42.5 points, at 34%) and RevPAR (-63.7%, at €33.2 excluding taxes). Over the month, it was among the leaders alongside France and Germany. 

In contrast, while the Netherlands was among the least affected countries at the beginning of the crisis due to softer health restrictions, the country recorded the sharpest fall in October. With an occupancy rate down 68.6 points (to 16%) and an average daily rate falling by 40.5% (to €73.3 excluding taxes), RevPAR collapsed by 88.8%, one of the worst balance sheets in the zone. Only Hungary and the Czech Republic, which are highly dependent on international tourism, exceeded them with a drop in activity of more than 90%. 

Therefore, all indicators are in the red for October, continuing the relapse of September. The sector, which was already struggling to recover after an encouraging summer, is undergoing the full force of this new wave and finds itself once again in the uncertainty over the health crisis, sweeping away any hope of recovery before the end of the year. 

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