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March 2019: Where are the clients of European hoteliers?

European hotel results in March 2019 are illustrated by a perfectly stable occupancy rate. With a few notable exceptions, prices are what keep RevPAR afloat. What developments can we expect in April after three consecutive months of stagnant performances? Will Easter celebrations and periods of fair weather combined with the resumption of festivals help boost performances? We' ll have a response next month. In the meantime, back to March which was as gloomy as the previous two months.

With an occupancy rate down -1.6 point on the budget segment, results are only slightly better for the economy (+0.1 point), midscale (+0.3 point) and upscale (+0.2 point) segments compared to March 2018. Year to date, occupancy rate performances are not much better with stagnation at +0.1 point and the budget segment down -0.3 point. The same trend may be observed over the last 12 months with an OR stagnating at +0.6 point, with the budget segment down slightly by -0.8 point.

Overall, European countries in the panel report a RevPAR at +1.1% compared to March 2018 driven by a +1.2 point increase in prices. The budget segment maintains a price increase by +2.5% for a stable RevPAR (31.5€ exVAT), the economy segment posts prices at +0.4% for a RevPAR at +0.6% (49.9€ exVAT). For the midscale, the RevPAR is up +1.7% (62.5€ exVAT) driven by prices up +1.3% and an OR at +0.3 point. The upscale progresses by +1.1% (93.7€ exVAT), with ADRs up slightly by +0.8% and the OR up by +0.2%.
Across all segments, the RevPAR is up +1.1% to reach 64.9€ exVAT with average daily rates at 93.4€ exVAT, or +1.2% and an OR identical to that in March 2018 or 69.5%. 

Disparate hotel performances 

This less than encouraging trend needs to be qualified because some continue to do well.

Austria is in the spotlight with a RevPAR that jumped +15.5%, driven by an increase in OR by +5.5 points and average daily rates that increased by +7.7%. Vienna posted a RevPAR of +17.3%. Luxembourg also posted a good month of March with a RevPAR up 9.3% (€107.7 exVAT), this time driven up by average daily rates (+6.1%), while OR increased by 2.2 points. Poland follows with a RevPAR up +7.9% (€40.4 exVAT) with an OR up +3.5 points (second best growth in the panel) and ADR up +2.4%.

In the second part of the panel, Belgium posts a RevPAR up +5.4% (78.2€ exVAT) with +2 points growth in OR and +2.5% for ADRs. Only Liège under-performs with the RevPAR down -13.1%.
In the Czech Republic the RevPAR is up +4.7% (42.1€ exVAT) with an OR that is stagnating with +0.7 point and ADR up +3.7 %, encouraging a prudent outlook for the months to come.
Spain follows +3.9% for the RevPAR (63.6€ exTVA) and Germany with a RevPAR +3.6 % (67.6 € exVAT). While Spain posts an OR up +2.5 points, Germany stagnates at +0.5 points.

Certain destinations struggle to maintain growth in hotel performances

Italie, Portugal and the United Kingdom flirt with stagnation with RevPAR up by just +0.8% (71.8€ exTVA), +0.4% (52.9€ exTVA) and +0.3% (74.7£ exTVA) respectively. While the United Kingdom and Italy remain positive in terms of occupancy rates, Portugal is losing -0.6 points (OR in Porto fell -4.3 points).

When others drop

France opens the ball of under-performing destinations with a RevPAR down -1.2% (59.1€ exVAT) and an OR down -1.8 points. Hungary also lost clients with an OR down -1.1 point, leading to a drop in RevPAR by -1.5%. The Netherlands post a RevPAR driven down -3.7% in ADR by -5.1% despite an OR that is stable at +1.2 point.

Latvia loses -6.8% in its RevPAR with an OR down -2.3 points and average daily rates down -3.0%. Finally, Greece loses -7.7% in its RevPAR despite average daily rates up +2.6%, the drop in OR by -6.9 points pulls performances down.

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