The year 2018 was generally positive for European hoteliers despite a slump in May, and it ended well. Across all segments, the RevPAR is up +4.6%, driven by slight growth in occupancy rate by +0.7 pt as well as average daily rates up +3.5% compared to December 2017.
In terms of occupancy rate, it is the economy segment that is performing best in Europe with +1.4 point growth, followed by the upscale segment with +0.9 point growth, and the mid-range segment just behind. The budget segment, which was already losing in November, closed the month with -1.3 points compared to December 2017. European hoteliers maintained the increase in their average daily rates, with the strongest increase for the budget segment at +4% to reach €47.6 excluding tax, followed by the mid-range segment at +3.7% (€87 excluding tax), the upscale segment at +3.1% (€133.3 excluding tax) and the economy segment at +2.9% of the average daily rate.
The strongest growth in RevPAR was seen in the Economy segment, where growth was +5.2% to €44.1 excluding tax - followed by the midscale segment, where growth was +5.1% to €54.6 excluding tax, and the upscale segment, where growth was +4.6% -€84.6 excluding tax. Not surprisingly, the RevPAR of the budget segment offer rose by only 1.6%, driven down by a slightly lower occupancy rate.
The 2018 year-to-date balance sheet is also positive, with an occupancy rate up 0.8 points, an average daily rate up 3.3% to €96.2 excluding tax and a RevPAR of +4.5% (€69.90 excluding VAT). A comprehensive analysis of the year for European hoteliers will follow in January 2018 in the surveys column of Hospitality ON.
A spoiled trio in the lead for the Christmas holidays
The overall champion across all categories (out of the three KPIs) remains Austria, which, after a slowdown in the spring, has shown an insolent increase in its performance indicators since June. The RevPAR rose by +21.1% to reach €95 excluding tax, driven by occupancy rates of +6.3 points and an average rate that logically rose by +11.8% to reach €115.7 excluding tax. The destination remains well ahead of its challenger Hungary, which also posted a double-digit increase in RevPAR +14% to reach €50.90 excluding tax. OR increased by +2.1 points and average prices by +7.6% to €63.20 excluding tax.
Poland closed the podium with a RevPAR that increased +7.7% driven by growth in average daily rates up +7.6% while occupancy rates stagnated at +0.1 point. Krakow is driving growth with a RevPAR of +25.8% (225.3 Zlotys excluding tax/approximately €52 excluding tax), while Warsaw is performing at half mast with a RevPAR that fell -7.2%; the same is true for Gdansk -7.9%.
A leading cluster that will not be outdone
The Czech Republic and Italy are neck and neck on the heels of the third-ranking country. With a +6.7% increase in RevPAR, the Czech Republic is taking advantage of a stable occupancy rate of +1.4 points to maintain its average price increase at +4.6%. Italy, on the other hand, increased its occupancy rate by +1.7 points and posted an average price of +3.3% to reach €97.6 excluding tax. Milan posted the best growth with a RevPAR up +14.7% (€70.1 excluding VAT), Turin, Rome and Venice also posted improved performances, unlike Bologna, Florence and Naples.
Spanish hoteliers also saw their RevPAR increase by +6.5% (€52 excluding tax) thanks to an occupancy rate that increased by +2.2 points and an ADR up +2.6%. Spanish destinations are performing well, with the exception to Palma de Majorca.
The United Kingdom posted more dynamic growth than in November 2018, with a RevPAR increasing by +6.3% to £66.2 excluding tax, driven by an occupancy rate up +2.2 points and average daily rates maintained at +3.1% growth. The British capital grew +10.1% in terms of RevPAR (£99.8 excluding tax) well ahead of the kingdom's other major destinations, which are all showing growth except Cardiff and Leeds-Bradford.
In the middle of the chart, Belgium and Luxembourg increased by +4.8% in Revenue per available room. The region grew +4.8% (€71.1 excluding tax) thanks to an increase in ADR by +1.5 points and a +2.4% increase in OR. Brussels and Ghent are doing well, while Antwerp and Liège are underperforming. The Duchy, on the other hand, maintained an increase in average daily rates at +7% (€127.8 excluding tax) despite a -1.5 point decrease in OR.
Germany, which maintains its occupancy rate with +0.9 points, posted a +2.8% increase in ADR to reach a RevPAR of €57.3 excluding taxes (+4.2%). Although Berlin is in excellent shape (+16.8% for its RevPar
to €65.5 excluding tax) Frankfurt, Hamburg, Stuttgart and Essen are driving national performances down.
The last in the ranks continue to grow
France had regained a growth track, but marked a pause with Paris losing 3.6 points in its OR, with the budget and upscale segments hit the hardest.
Latvia maintains its RevPAR at +2.6 % (36.6€ excl. taxes) with slight growth in average daily rates by +2.5% despite a totally stable occupancy rate.
The Netherlands post a RevPAR up by +1.3 % (70€ excl. taxes) despite a slight drop in IR to -0.4 point, an increase in average daily rate by +1.9% helps it remain positive.
Portugal stabilises at +1% growth in its RevPAR (39.5€ excl. taxes) due to an OR up +0.8 points which has not prevented hoteliers from decreasing their average daily rates by -0.4%. While Lisbon just barely continues to grow, (0.8%), Porto lose 3.7% of its RevPAR.
In a downturn phase since September, Greece's RevPAR is down for the first time since April 2018 by -0.4 % (to 49.4€ excl. taxes). Despite efforts to continue increasing the ADR by 4%, the drop in OR by -2.4 points had a strong impact on results.
Positive annual trends across all destinations in Europe.
The year 2018 closes with an increase in the RevPAR for all European countries. A comprehensive analysis with follow in the pages of Hospitality ON.
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