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Analyses

July 2022: a great summer for the European hotel industry

Despite numerous hurdles (heatwaves, geopolitical and economic crises, lack of staff, etc.) the European hotel industry seems to be overcoming every obstacle in its path. In fact, the month of July shows very positive results in Europe.

Apart from a few countries, the European hotel industry seems to have finally made a fresh start: overall, it is doing well with a RevPAR of 13.9% higher than its pre-Covid level. While performance is being driven by an increase in the average price (while the average price gap was 12% between June 2019 and 2022, in July the gap rose to +20.8%), it should be noted that the occupancy rate gap is only 4.5 points below its pre-crisis level!  

All the ranges are affected by this dynamic: the budget segment has almost regained its 2019 attendance (-0.9 points) and even the top-of-the-range segment, which had been more affected, is now only 7 points away.

Greece and Portugal are leading the recovery in July with RevPAR levels up by more than 25% compared to July 2019. This month, Greece even posted a higher occupancy rate than before COVID (+1.7%) and Portugal is only 0.6 points away from its 2019 level.  These destinations have indeed benefited from the return of international customers, as has France which, in third place, posted a RevPAR of +21.2% compared to 2019.

 

The dynamic is more moderate in the rest of Southern Europe: +19.3% in Italy and 11.5% in Spain. However, it should be noted that the Italian season also tends to start slightly later (August-September).

Further north, July was also much better than June. The Netherlands (+4.3%), Belgium (+5.8%) and Austria (+8.8%), which were still behind in June compared to June 2019, show now higher results than in July 2019 due to the increase of ADR.

Germany shows a 6.3% growth in activity while the UK maintains its growth with a RevPAR of 12.7% above its 2019 level.

Luxembourg, on the other hand, is still impacted and is struggling to regain its pre-crisis level (-10.1% RevPAR compared to July 2019) due to an ADR and occupancy rate still lower than July 2019.

Apart from Luxembourg, Eastern Europe also remains quite behind, impacted by the war in Ukraine. Difficulties persist, particularly in Latvia (-23.1%) and the Czech Republic. However, Hungary (+16.9% RevPAR) and Poland (+16.6%) are doing very well, notably due to a sharp rise in average prices (+50% and +22.5% respectively). Hungary, however, has the largest gap in OR relative to 2019 (-18.3 points).

Except for those countries affected by political conflict, July was therefore a very good month for European hoteliers. If August were to follow the same trend, what impact would economic and social challenges have on the choice of tourists in the future?

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