Despite worsening economic conditions, the performance of the European hotel industry has remained remarkably resilient during the first half of 2001.  Results from the Andersen Hotel Industry Benchmark Survey, which monitors the performance of over 3,000 hotels across Europe, reveal that for the year-to-June overall demand fell 1.1 percent, reflecting the current economic climate and curtailment of some travel.  However, average room rates grew by 4.7 percent, well above the eurozone inflation rate to reach €114, contributing to positive revPAR growth of 3.5 percent. 

There was a marked variance in the performance of capital and secondary cities across Europe during the first half of the year.  Generally, southern European markets performed more strongly than their northern counterparts.  Paris, Rome, Milan and Barcelona all reported double digit revPAR growth in the six months to June, whilst London and Amsterdam both recorded below average revPAR growth.  One of the contributing factors to this was the exceptional performance of these markets in June 2000, (when Amsterdam played host to the Euro 2000 Football Championships and London hosted the biennial Farnborough Air Show.)

London hoteliers are clearly finding trading conditions difficult in 2001.  With nearly 50 percent of demand generated by visitors from abroad, the decline in visitor levels has hit the capital hard.  June was the sixth month in a row when occupancy levels fell, however, London remains one of the strongest hotel markets in the world, with annual occupancy levels often over 80 percent. Despite the fall in demand, London�s hoteliers have managed to sustain growth in average room rates, both in sterling and euros.  London hotels recorded a fall in revPAR of 2.2 percent when measured in sterling (3.4 percent in euros) for the first half of the year, comprised of an occupancy decline of 4.9 percent and average room rate growth of 2.8 percent. 

In the UK provinces the impact of the foot-and-mouth crisis, which started in February, does not appear to have significantly impacted the performance of hotels in our survey during the first half of 2001, although this is not necessarily the case for smaller hotels and guest houses located in more rural locations.  There was a marginal fall in the occupancy of regional UK hotels in June, but this was offset by a greater advance in room rates, resulting in a growth of 1.4 percent in revPAR for the month when measured in sterling.  Results for the first half of the year show that increases in both occupancy and average room rate have pushed revPAR up by 5.5 percent over the first half of 2000, when measured in sterling. 

Commenting on the findings, Julia Felton, Head of Hospitality Knowledge Services at Andersen said:  �Our prognosis for the European hotel industry remains cautiously positive.  Certainly the industry is experiencing a slowdown in demand, but with hoteliers standing firm on average room rates, we do not currently anticipate a fall in overall revPAR this year.  The return of corporate demand in September, after the summer recess, will however, provide a good indicator as to how the year end performance across Europe will pan-out.� 

Performance of selected European markets for the year to June 2001
 

Launched in 1996 as the definitive source of hotel performance data outside North America, the Andersen Hotel Industry Benchmark Survey comprises information gathered from more than 5,000 hotels in 240 markets across 140 countries. Hotels contributing to the survey are typically graded from three to five star. The survey currently tracks hotel performance everywhere outside the Americas.  Regional surveys are produced for Asia Pacific, Caribbean and Latin America, Europe and the Middle East & North Africa.  These are supported by in-depth country/city reports for Australia, Germany, Italy, New Zealand, South Africa, the UK and London.  For more information, or to join the survey, contact Lorna Clarke in London at 44 20 7438 2870, e-mail us at [email protected]