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Analyses

September 2021: the European hotel industry looking for business customers

Summer 2021 which had given a glimmer of hope to the tourism sector comes to an end. After a summer that was not very sunny but which provided reassurance to hoteliers, particularly in Southern Europe, European tourism activity fell back again in September due to the absence of corporate and international clientele. Although the events sector is slowly picking up, it is not yet in full swing.

The beginning of the summer confirmed the return of hotel performance. However, while leisure customers were still present in September, business customers were hard to find. All European countries enjoyed significantly better performances than last September. On a European scale, although the overall hotel occupancy rate is still down by 21.7 points compared to the pre-crisis period, it is still much higher than last year at the same time (+22.3 points) and is even better than in August (+2.9%), which was rather good in this second month of September under pandemic.

The month of September 2021 was therefore much better than last year, thanks in particular to the generalization of vaccination throughout the continent. In terms of range, it is still the budget and economic segments that are doing well, with respectively -11 and -18.1 points drop in occupancy rate compared to before the crisis. However, the midscale and upscale segments, which had suffered the most from the crisis, still managed to gain 22.7 and 27.2 points compared to last year, confirming that all sectors are on the right track.

But the budget, economic and midscale ranges, which had returned to their pre-crisis levels in August, are again experiencing price declines. While prices remain better than in 2020, they are still well below their pre-crisis levels (-18.4%), with a larger gap in the upper ranges (-20.5% for the upscale segment versus -4.6% for the budget). In September, Europe-wide, hotels recorded lower RevPAR growth than in August 2021, but it is still more favorable than last year: +96.3% between September 2020 and September 2021.

After a great summer season in southern Europe, September slowed down the hoteliers' enthousiasm in Italy and Spain. Indeed, the RevPAR fall by more than 30% compared to the pre-crisis period. Greece, champion of the summer, retained its title with an occupancy rate even higher than the previous month (67.2%). However, lower average prices triggers a fall in its RevPAR compared to August 2021.

France is doing well, with the performance closest to that of the pre-crisis period: only a -27.4% decline in RevPAR compared to September 2020. Its occupancy rate is better than in August, reaching 62.4% in September (only -15 points lower than in 2019). Indeed, while tourists have returned, September events and corporate travel are less numerous than before the pandemic.

On the German side, performance was very good compared to August: occupancy rate rose by 3.8 points and prices increased by 16%, which had a positive impact on its RevPAR. However, RevPAR still remains 43.6% below pre-crisis levels. Austria is not faring much better with a RevPAR level of -36.6% compared to September 2019.

Benelux is also suffering from the absence of business customers: -60.3% drop in RevPAR in the Netherlands, -52.9% in Belgium and -45.8% in Luxembourg. The United Kingdom remains at a constant level compared to the previous month with a 64.3% occupancy rate, an average price at only -14.6% compared to 2019 and RevPAR at -35% compared to pre-crisis.

Czech Republic and Latvia are still struggling to regain their pre-covid performance levels with respectively -65.8% and -63.7% of activity.

Consequently, the absence of events, the introduction of the health pass in certain destinations, new restrictions and new habits within companies (work from home, digital meetings, etc.) have not encouraged the resumption of business travel. Will this drop in activity compared to the pre-crisis period last until the end of the winter? The school vacations can still to make a difference.

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