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Monthly RevPAR of the 25-Nation European Hotel
Industry Rose by 5.2% in May 2004, 
Recovery Continues / MKG

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Paris, 12, July 2004 - Thanks to a rise in occupancy rates and the average room rates, the monthly RevPAR of the 25-nation European hotel industry rose by 5.2% in May. This new positive results are evidence of the recovery in activity after nearly 3 years of net slowdown. In May, all categories posted a positive RevPAR. Over 12 months combined, the RevPAR of the European hotel industry remained nearly unchanged. 

Europe is enlarging, MKG is following!

Beginning in May, the aggregates of indicators published by MKG Consulting have grown to include activity results from hotels in the 10 new member-states. Changes are also to be seen in the upcoming issue of HTR, since there you will find the results by country of 5 new countries: Poland, Hungary, The Czech Republic, Denmark, and Sweden.

Montly results of the corporate chain hotel industry
by category in Europe for May 2004. 

Occupancy rate 
05/04
Occ. Rate difference (pts)
Average Room Rates 05/04
Change in ARR in %
RevPAR 05/04
Change in RevPAR (%)
0*
74.9%
0.6
29.2
6.5%
21.9
7.4%
1*
75.8%
2.0
37.9
3.7%
28.7
6.5%
2*
73.5%
2.8
64.7
4.3%
47.6
8.5%
3*
67.5%
1.3
84.7
1.0%
57.1
3.1%
4*
68.6%
1.6
129.3
3.2%
88.7
5.7%
GLOBAL
69.5%
1.7
94.3
2.7%
65.6
5.2%
Source: MKG Consulting Database - official supplier of chain hotels - June 2004 
Average room rates and RevPAR in Euros incl. VAT

It is with optimism that the hotel activity results were gathered by MKG Consulting for the month of May. These statistics have confirmed, before the arrival of the summer season, the turnaround in the trend that we have been seeing over the last two months. The average occupancy level rose to 69.5%, i.e. 1.7 points more than last year. The average room rates recorded a rise of 2.7% to 94.3 euros. These developments have led to a rise in RevPAR of 5.2% over the previous year.

These positive results followed an already encouraging March and April (+7.6% and +6.5% respectively), though for which the rises may also be attributed to the weakness of the indicator levels reached in 2003, in the midst of the Iraq war, and while the consequences of the SARS epidemic in Asia were still lingering.

However one must go back to November 2002 to find 3 consecutive months of a rise in RevPAR.

Results by category show the very good performance of all segments. The budget 2* hotel industry recorded the most satisfactory results, and posted a solid gain in RevPAR, with rises in both occupancy levels (+2.8 points to 73.5%) and the average room rates (+4.3% to 64.7 euros incl. VAT).

As in previous months, the hard-budget categories (0* and 1*) insured a rise in RevPAR by maintaining sustained growth in the average room rates. We note however, that in May, there was a high increase in occupancy rates: +0.6 points to 74.9% in 0* and +2.0 points in 1*. The strong growth in the chain supply in recent months is therefore perfectly assimilated.

The midmarket and upmarket segments did not return to the rises in occupancy rates observed in April, where the "catching-up" affect over the years is much more pronounced. We nevertheless note that they remained resolutely oriented upwards (+1.3 points in 3* and +1.6 points in 4*). In that which concerns the average room rates, the growth of 3.2% observed in the upmarket properties is all the more significant since it followed an already positive change in May of last year.

Corporate chain results by category in Europe, over
12 months combined as of the end of May

Occupancy rate 
05/04
Occ. Rate difference (pts)
Average Room Rates 05/04
Change in ARR in %
RevPAR 05/04
Change in RevPAR (%)
0*
71.8%
-2.1
28.5
6.7%
20.4
3.6%
1*
71.3%
-0.5
37.0
4.6%
26.4
3.9%
2*
68.3%
-1.6
63.1
2.1%
43.0
-0.3%
3*
63.0%
0.1
81.9
-0.9%
51.6
-0.7%
4*
64.3%
-0.3
121.5
0.1%
78.1
-0.4%
GLOBAL
65.1%
-0.4
89.9
0.3%
58.5
-0.4%
Source: MKG Consulting Database - official supplier of chain hotels - June 2004 
Average room rates and RevPAR in Euros incl. VAT

Over 12 months combined, the RevPAR has remained virtually unchanged. The revenue per available room rose to 58.5 euros, which is only down by 0.4%. The occupancy rates nearly reached previous levels (-0.4 points) and the average room rates were stable (+0.3%). The hard budget hotel industry continued to maintain good results with rises in RevPAR greater than 3.5%. Results from 2*, 3*, and 4* hotels were slightly in retreat, though we are far from the falls sometimes seen in previous months.

These efforts have unfortunately not yet been fruitful. The Netherlands still posts a monthly drop in RevPAR (-1.8%) though with regards to the indicators seen in recent months (RevPAR aggregated over 12 months combined was down by 9.5%), this drop ultimately appears limited. The assessment is less encouraging for Spain, which posted a RevPAR that was down by 11.2% in May. The occupancy rates and average room rates were clearly down (-3.2 points and -7% respectively). Over 12 months, RevPAR has been in retreat by 4.8%.

Though the global results for the month of may have resulted from more sustained growth in the Union, they must also be attributed to efforts made by hoteliers to optimise their income within an environment that is still uncertain. The systematic adaptation of rates thanks to yield management techniques, and the development of new distribution channels such as the internet have allowed limiting the drops in occupancy in the majority of the countries. Policies aiming at conquering new customers have been fruitful. Russian customers, and those of the emerging Asian markets (and Chinese customers in particular), are highly sought after and are increasingly present in Europe.

Corporate chain results by country in Europe, over
12 months combined as of the end of May

Occupancy rate 

05/04

Occ. Rate difference (pts)
Average Room Rates 05/04
Change in ARR in %
RevPAR 05/04
Change in RevPAR (%)
GERMANY
59.3%
1.4
80.8
-2.6%
47.9
-0.3%
AUSTRIA
70.9%
3.5
76.7
1.0%
54.4
6.3%
BELGIUM
65.2%
0.4
86.0
-1.3%
56.1
-0.7%
ITALY
65.1%
2.0
113.3
0.5%
73.7
3.6%
NETHERLANDS
66.8%
-3.1
97.1
-5.3%
64.9
-9.5%
UNITED KINGDOM
72.9%
1.3
109.4
1.7%
79.8
3.5%
SPAIN
65.7%
-1.8
90.5
-2.3%
59.5
-4.8%
PORTUGAL
66.3%
-1.6
80.0
0.5%
53.1
-1.9%
FRANCE
66.6%
-1.4
70.9
1.5%
47.2
-0.7%
OVERALL*
65.1%
-0.4
89.9
0.3%
58.5
-0.4%
Source: MKG Consulting Database - official supplier of chain hotels - June 2004 
Average room rates and RevPAR in Euros incl. VAT
* Including the 25-nations of the EU not mentioned above

Methodology
The European database of MKG Consulting contains a sample of 6,000 corporate chain hotels representing 600,000 rooms in Europe. The data, gathered monthly from each hotel, is redressed by categorical division of the corporate chain hotel supply and by weight in the European Union. MKG Consulting has the largest hotel database in the world outside the USA, with a good representation of all the hotel segments.

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Contact:

Georges Panayotis
+33 (0)1 56 56 87 90
georges.panayotis@mkg-consulting.com
http://www.mkgconseil.com

 
Also See: French Chain Hotel Performance On the Rise, May 2004 RevPAR Up +8.5% Over Previous Year / MKG Consulting / June 2004
The 2004 Ranking of Hotel Groups; Including the Ten Hotel Groups with the Greatest Increase in Number of Rooms / MKG Consulting / June 2004
RevPAR of Chain Hotels in France Rose by 8.1% in March 2004 / MKG Consulting / May 2004
2004 Rankings of the 10 Largest International Hotel Groups and the 20 Largest Brands; InterContinental Hotels Group Overtakes Cendant / MKG Consulting / March 2004
2004 European Ranking of Hotel Groups; Best Western Holds Top Position of 25 Brands in Europe / MKG Consulting / February 2004
Despite One of the Worst Years in International Tourism, the French Hotel Industry Managed to Record Only a Moderate Drop in RevPAR in 2003 / MKG Consulting / January 2004
RevPAR Falls 2.9% for the European Hotel Industry for 12 Months through November 2003; Austria Rises 6.1% in RevPAR / MKG Consulting / January 2004
European Budget Hotel Industry Shows Growth in RevPAR; Not as Cheerful in the Other Hotel Segments / MKG Consulting / November 2003
European Hotel Chains: New Downward Slide in July, 2003 / MKG Consulting / Sept 2003
Finally a Month of Strong Rises in the German Hotel Industry / MKG Consulting / July 2003
Hotel Industry in Europe: Record Drop in the RevPAR in April 2003, But Slight Decrease of the Mid-term Trend / MKG Consulting / May 2003
The Worldwide Ranking of Hotel Groups 2003; The World’s Top Ten International Groups Increase Their Supply by 2.6% / MKG / April 2003
The French Hotel Industry Confirms its Solidity in 2002 and Serenely Forecasts a Year 2003, Despite Geopolitical Instability / MKG Consulting / Feb 2003
European Hotel Industry: Like Last Year, France is Doing Better than all its European Neighbours in 2002 / MKG Consulting / Jan 2003
European Hotel Industry: An Encouraging Month of October / MKG Consulting / Dec 2002
Europe’s Hotel Industry: France Posts Record Performance for September, 2002 / MKG Consulting / Oct 2002
Assessment of the Summer Season for the European Hotel Industry / MKG / Oct 2002


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