A
report just issued by MKG hospitality for ECM members has revealed a
some-what mixed performance for European hotels in the first half of
the year to July but a strong result for certain cities in August
with an average 5.7% growth in revenue per available room (RevPAR).
Vanguélis
Panayotis, Director of
Development MKG Group commented “the growth is not actually the
result of an increased trend in occupancy in European hotels, but
rather due to an increase in average daily rates, thanks to
exceptional circumstances in a small group of countries. The overall
trend is in fact a decrease in occupancy rate (although it remains
high for August) combined with a fairly contrasting change in average
daily rates depending on geographic areas. The Olympic Games in
London and the German exhibition and fair market successfully
brought indicators into the green, while the majority of European
countries struggled with the impact of the economic crisis.”
Success
in Germany
Since
the beginning of the year, several German cities recorded good
results due to their well-developed business and MICE activity. In
the north of the country, Berlin registered a
RevPAR’s growth of 6.9%, due to a positive increase in the
occupancy rate. Dusseldorf, with its well-known exhibition and
fair market, succeeded in reaching growth of 6.2% RevPAR’s. In
the south, the dynamic city of Munich hosted the annual Congress of
the European Society of Cardiology with 30,000 participants during 4
days – a significant boost for their hotel sector.
Contrasting
results in Nordic
There
were contrasting results for Nordic countries. Copenhagen recorded an
increase in RevPAR of 2.4% whilst Helsinki increased by a significant
and impressive 8.3%. However, performances in Sweden and Norway
followed a reverse trend. Oslo hoteliers had to lower their prices by
more than 12% to keep the occupancy rate stable. In Stockholm, the
occupancy rate decreased by almost 3 points.
Southern
Europe: Barcelona and Bilbao buck the downward trend
The
economic downturn in Spain impacted hotel performance throughout the
country with the exception of Bilbao ( that increased 2.5% ) and
Barcelona where RevPAR increased by 6.4%.
Occupancy
rate in Madrid was down by nearly 3 points, whereas in Seville, the
drop was 4 points and in Zaragoza 5.6 points. The Italian hotel
industry also encountered decreased demand with all markets showing
a negative variation in occupancy rate, especially in Venice with a
decrease of 8.6% and Florence with a 4.6 points decrease.
The
UK and the Olympics
The
United Kingdom is taking advantage of the effect of the Olympics that
placed London in the front line of the media. Indeed, the Average
Rate reached £137.0, up 36.3% and RevPAR rose 35.8% to £117.7 in
London in the month of August. However, the Olympics did not result
in a higher occupancy rate, due to displacement factors in July
during the games.
Garry
White, CEO of European Cities Marketing commented
“ the results show that we are now in a highly competitive
environment to attract business and meetings to European Cities and
that successful bids for major events and international meetings can
make the crucial difference in annual hotel occupancy rates. Given
the economic backdrop an increase of 5.7% in August RevPAR is an
excellent and encouraging result for the industry “
