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May 2020: a dim light at the end of the tunnel

After passing through a nadir in April, the European hospitality industry is still deep in the red, although some degree of stabilization was attained this month. With the unfreezing of some markets by the end of May, some very modest improvements have been recorded.

OR managed to climb a little (6.8%), yet this level still represents a decline of 67.8 percentage points with respect to May 2019. Prices are down by 38.6%, totaling 64.1 euros excluding tax, which led to an overall RevPAR of 4.4 euros excluding tax. A decrease of 94.4% compared to the previous year, yet still, a very slight improvement compared to the plunge that was experienced during April 2020.

As was the case during April 2020, the Budget segment suffered the least during May 2020 and is the only category that managed to reach an OR that climbed up to the double-digits. With an OR of 15.0%, the segment's occupancy rate has experienced a decline of -52.8 points. Average daily rates went through a decline of 13.5%, which led to a RevPAR that totals 6.7 euros excl. tax and a decrease of 80.8%. In the economy segment, OR is down 67.1 points (8.2%), prices declined by 21.7% (59.9 euros excl. taxes) and RevPAR decreased by 91.5% (4.9 euros excl. taxes).  The midscale supply features an occupancy rate and average daily rate down by 69.4 points and -26.3%, respectively, hence a -94.6% fall in RevPAR. With a severe slump in business & international tourism, it is not surprising that the upscale market continues to flatline: as OR reaches 3.3% and prices are down by 36.0%, RevPAR is down by 97.3%.

Year to date figures continue to go further into negative territory, as the effects of the coronavirus crisis further deteriorate the gains at the beginning of this year;  OR is down -36.6 points (31.6%), prizes decreased 7.2% (89.2 euros excl. tax) and RevPAR fell by 57.0% (28.2 euros excl. tax).

Despite May being characterized by some degree of heterogeneity in terms of lockdown regimes, all European destinations are still globally depressed by losses of more than 90% of RevPAR. 

The United Kingdom (9.3%; -71.7 pts), Germany (8.5%; -67.1 pts.) and France (8.0%; -60.0 pts) are faring best in terms of occupancy. Yet, relative to other European destinations, the German market has been the most successful in moderating the impact of the crisis, as it had the lowest RevPAR decrease (-90.8%) thanks to somewhat resistant prices (79.4 euros excl. tax; -17.7%). With a RevPAR of 6.7 euros excl. tax, Germany was the best performing market in May, ahead of countries such as France (4.3 euros excl. tax), the UK (5.5 euros excl. tax), and the Netherlands (4.6 euros excl. tax).

Southern European markets recorded some of the largest falls in performances; with Spain, Italy and Portugal falling below the 2 euro mark and featuring RevPARs of 1.2 euros excl. tax, 1.9 euros excl. tax and 1.3 euros excl. tax, respectively.

Trends Europe May 2020Infogram

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