For the first time in two years, European hoteliers were able to enjoy a sunny summer after the storm that was Covid-19. With occupancy rates almost back to normal and prices up sharply, European hotels have performed strongly, although the geopolitical context is slowing down Eastern European countries.
In the summer of 2022, the European hotel industry posted a 14.2% increase in RevPAR. This was driven by a 20.2% increase of ADR, while OR was still 3.9 points behind its 2019 level. Indeed, Russian and Chinese customers are the big absentees of this summer in Europe and therefore pull the OR down.
All ranges benefited from this performance in a relatively homogeneous manner, with RevPAR increases ranging from 12.7% for midscale hotels to 15.8% for hotels in the budget segment. This homogeneity conceals different sources of progress: hotels in the economy and budget segments posted smaller price increases (18.0% and 16.8% versus +20.0% and 26.7% for hotels in the midscale and upscale segments) but benefited from ORs closer to their 2019 levels (-0.6 and -2.6 points versus -4.7 for the midscale and 7.3 points for the upscale).
Still from the point of view of the different ranges, there were two phases this summer: while upscale hotels had the strongest growth in July (+16.8% compared to 2019), it was the budget segment that performed best in August with a 17.8% increase in its RevPAR compared to August 2019. In fact, prices for upscale hotels rose less quickly in August than in July, even though this is the segment most impacted by missing customers. At the same time, however, the budget segment increased its prices less sharply, as tolerance to price variations is more sensitive in this segment (+17.8% in August compared to +24.1% for upscale hotels), but unlike the other ranges, has fully recovered its August 2019 occupancy level.
In general, it was the southern countries that signed the strongest performances during the summer: +22.0% RevPAR compared to 2019 for Italy, +22.8% for Portugal, +23.3% for Greece. These performances are due to ORs closer to their 2019 levels (from -0.1 to -1.9 points) while their prices have increased more strongly than the other countries (from +18.4% to +32.8% points). Indeed, these traditionally attractive destinations were able to increase their prices more strongly without risking pushing away the usual clientele, itself encouraged by a first summer without health restrictions.
But this summer also saw the return of Northern European countries: Germany and Belgium saw their RevPAR increase by 8.4% and 9.3%. The return of long-haul flights benefited Germany in particular, which had suffered longer than other countries from travel restrictions. The Netherlands, whose health restrictions were lifted more recently than in most of Europe, is timidly raising its head with a RevPAR of 2.7% above its 2019 level. The destination can also capitalize less on its corporate clientele to fill its establishments.
The United Kingdom and Spain, other heavyweights of European tourism, have posted more mixed results this summer, due to prices that have risen less strongly than the European average (+11.0% and +11.7%) and attendance has not pulled the performance of these destinations upwards, due to uncontrollable inflation for the first, and fires and repeated heat waves for the second.
Eastern European countries remained strongly impacted by the geopolitical situation during the summer: Latvia and the Czech Republic posted RevPAR of -21.1% and -16.6%, due to very low ORs, respectively -13.0 and -13.1 compared to 2019, combined with prices that have stagnated or even fallen. On the other hand, Hungary posted one of the best performances of the summer of 2022 with an increase in its RevPAR of 20.6%: it should be noted that this increase is linked to a price that is 56.6% higher than its 2019 level, itself driven by an exchange rate that had already increased since the beginning of the pandemic, and which has exploded since the beginning of the year 2022. Indeed, the Forint is on August 1, 2022, and against the euro, 22.9% higher than its level of August 1, 2019. In addition, Hungary's OR is 19.7 points lower, the highest gap in Europe. Poland, meanwhile, is in a situation closer to the best-performing European countries of the summer, with OR almost at its 2019 level and a price level 19.2% above its pre-crisis level.
In conclusion, the majority of European hoteliers were able to savor the long-awaited return to normal after two years of health crisis, even if the countries of Eastern Europe were not able to take advantage of this respite, hit hard by the return of war in Europe. Will these results help hoteliers face the challenges of the new year (inflationary shock, energy restrictions, adaptation to climate change)?
