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Analyses

January 2022: the European hotel industry once again hit by a yo-yo effect

The lull at the end of 2021 was short: at the beginning of January, all European countries were hit by the "Omicron wave", leading to further declines in activity across the continent after several months of rebound from October to November. Thus, despite the hopes raised by the active vaccination drive, the hotel sector was hit by new restrictions throughout Europe at the end of 2021 and in January 2022, thus hampering the hotel activity.

In January, hotel performance declined even more after a few months of recovery: RevPAR, which had been -35.5% under its pre-crisis level in December, fell back to a gap of -49.9% in January relative to January 2019.

The occupancy rate stood at 32.4%, it is to say 25.9 points lower than pre-crisis. While this is 16 points higher than January 2021, we have to remember that January 2021 had seen some very alarming results. In the same way, prices that had managed to recover their standards in the end of 2021 have fallen again (-10% below 2019). After almost two years of health crisis, RevPAR levels are still twice as low as they were in 2019.

But the whole continent was not experiencing the crisis at the same rythm. Compared to its European neighbours, France recorded one of the smallest declines in activity in January with -37%, just behind Poland (-35%). However, France, which have known a drop in activity of only -14% the previous month thanks to Christmas and New Year's holidays, no longer seems to be on the road to recovery. However, other countries such as the Netherlands and the Czech Republic are much more affected with respectively -79.3% and -70.3% decline in activity compared to January 2019.

Behind France, the United Kingdom and Spain show a -40.6% and a -38.9% decline in activity while Germany records a much steeper monthly decline (-68.6%). While the UK and Spain manage to return to price levels almost similar to those before the crisis (-1.5 and -1.4%), Germany remains on the sidelines with an average price at -19% relative to January 2019.

 

In general, most European countries have experienced a drop in activity in January. Only Belgium, Austria, Latvia and particularly Hungary managed to have better business recoveries in January than in December. Hungary benefited from a significant increase in its average prices (+37.7%), enabling it to post a RevPAR only -19% below normal. Despite still low average prices, Belgium and Austria, which were hit earlier than their European counterparts by the Omicron wave, saw a recovery in activity at the beginning of the year. Indeed, Austria had the biggest drop in activity with 80.2% in December due to its total reconfinement until December 12. Today, the country has managed to catch up, notably by increasing its average prices.

In the Benelux countries, which have long been on the sidelines due to the absence of business and international clients, the situation in Belgium is improving. Luxembourg, on the other hand, remains far behind, with RevPAR down 58.7%. While the situation is most affected in the Netherlands (-79.3%), it could improve soon thanks to the easing of health restrictions on January 25, which were previously among the most restrictive in Europe.

However, on a continental scale, the end of restrictions and the arrival of sunny days should finally mark the return of bookings and, thanks to a real acceleration of vaccination worldwide, in the fairly short term, customers who had escaped the European hotel sector until now could come back.

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