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 In July 2004, the Occupancy Rates of the European Hotel Industry Virtually Unchanged Over Last Year;
-
France, Spain, and Italy Only Countries in the
European Union to Post Drops in Occupancy
Paris, 7 September 2004

The European hotel industry continued its recovery in July

  • With a rise in RevPAR that was up by 1.7% in July, the pickup in the hotel industry in Europe has not been halted even though the rise was less spectacular than that of the month of June (+5.6% in RevPAR).
  • Occupancy rates are quite stable (+0.5 points) and the average room rates are also near to those of last year (+1.0%).
  • Since the beginning of the year, the trend has been towards improvement. Total RevPAR from January to July increased by 3.9% at the level of the 25-country European Union over last year.


Monthly results of the corporate chain hotel industry
by category in Europe in July 2004

Occupancy rate 07/04
Difference in Occ. rate (pts)
Average daily rates 07/04
Change in ADR (in%)
RevPAR 07/04
Change in RevPAR 

(in %)

0*
80.6%
-1.5
30.6
6.2%
24.6
4.2%
1*
77.0%
-1.1
39.5
3.4%
30.4
2.0%
2*
73.9%
0.4
63.9
3.7%
47.2
4.3%
3*
66.2%
1.4
75.4
-0.9%
50.0
1.3%
4*
65.4%
0.0
119.5
1.2%
78.2
1.3%
TOTAL
68.2%
0.5
86.5
1.0%
59.0
1.7%
Source: MKG Consulting Database – Official statistics from hotel chains - August 2004
Average daily rates and RevPAR in Euros inclusive of tax. 

A moderate rise in RevPAR in July 2004 

In July, the occupancy rates of the European hotel industry were virtually unchanged over last year (+0.5 points). This figure remains positive, even though it is down versus those of May and June (+1.7 points and 2.5 points respectively).

All categories had a difficult time with occupancy in July. This is the case in the hard-budget categories, which experienced hardship in incorporating the expansion of the supply in recent years. Even though the average occupancy of these properties remains at a very satisfactory level, at 80.6% in 0* and 77.0% in 1*, the change from one year to the next was slightly negative (-1.5 points and -1.1 points respectively). The upmarket hotel industry saw a globally acceptable month of July, with occupancy rates identical to those of last year. Only the 2* and 3* categories saw their occupancy increase this year from 0.4 points in 2* to 1.4 points in 3*.

Hotels in the 2* category saw the largest increase in RevPAR (+4.3%), thanks to a significant increase in average daily rates. The hard-budget categories also posted a rather strong increase in RevPAR, sustained by enough growth in average daily rates to compensate for the drop in occupancy. The upmarket hotel industry once again saw an improvement in RevPAR in July, also thanks to action in the average daily rates. However, the manoeuvring room is limited for the 4* hotels. Rises in the average daily rates by 1.2% and RevPAR by 1.3% did not compensate for the drops recorded in July 2003, which saw hotels’ average daily rate in this segment fall by 5.0%, leading to a slide of 5.8% in RevPAR versus July 2002.

Results of the corporate chain hotel industry by category
in Europe total over 7 months at the end of July 2004

Occupancy rate 07/04
Difference in Occ. rate (pts)
Average daily rates 07/04
Change in ADR (in%)
RevPAR 07/04
Change in RevPAR 

(in %)

0*
72.3%
-0.9
29.4
5.6%
21.3
4.3%
1*
71.5%
0.1
37.6
3.7%
26.9
3.8%
2*
69.2%
1.2
63.9
3.3%
44.2
5.1%
3*
62.7%
1.8
82.1
-1.2%
51.5
1.7%
4*
64.2%
1.8
124.9
2.0%
80.2
4.9%
GLOBAL
65.1%
1.5
91.5
1.5%
59.6
3.9%
Source: MKG Consulting Database - Official statistics from hotel chains - August 2004
Average daily rates and RevPAR in Euros inclusive of tax.

According to the general opinion, the return of non-European customers, notably North American, was not as great as hoped. Many observers have noticed that the budgets of these consumers is down versus previous years, due to the high value of the European currency versus the dollar, since the former has reached record levels in recent months.

Within this context, 3* hotels post an increase in RevPAR just as moderate, due to a greater competition from more upmarket hotels.

The trend since the beginning of the year has been leaning towards an improvement.

The total results since the month of January temper this mitigated result. By the end of July, the trend remained largely on the rise. The average RevPAR of the European hotel industry rose by 3.9%. This improvement in indicators resulted from a simultaneous rise in occupancy rates and average daily rates (+1.5 points and +1.5 points respectively) versus the same period in 2003.

In terms of RevPAR, all segments benefited from an increase in their results. We nevertheless notice the difficulties encountered by the 3* hotel category in maintaining their average daily rates, down by 1.2%.

Traditional tourist destinations are facing competition

Results by country show great heterogeneity. The traditional tourist destinations that are France, Spain, and Italy have recorded a somewhat mitigated month of July. RevPAR is on the decline in those countries by 1.1%, 8.5%, and 1.4% respectively. They are the only countries in the European Union to post drops in occupancy in July.

There are various reasons for this. Spain saw its supply increase significantly in recent years. In France, the weather has not been very favourable, while some holidaymakers on the other hand feared another heat wave such as the one that the country saw last year. Finally, the source markets, both American and European, and notably Germany, did not provide the number of customers anticipated.

The emergence of new destinations (Croatia, Maghreb) that are coming into competition with the major tourism countries is now a fact. The United Kingdom, the Nordic countries, as well as Eastern European countries have all done well with highly significant rises in RevPAR, thanks to sustained increases in occupancy rates.

The totals since the beginning of the year have confirmed the excellent position of the hotel sector in the United Kingdom (increase in occupancy rate of 3.2 points and a rise in average daily rates of 7.2%) and the return of a more sustained demand in Germany, where the efforts made in terms of average room rates have not stalled the rise in RevPAR, on the rise by 4.2%. On the other hand, hotel indicators remain strongly down over last year in Spain, where the drops in average daily rates has not allowed maintaining occupancy levels. The results recorded since the beginning of the year in France places the country slightly below the European average: improvement in occupancy rates, accompanied by moderate growth in average daily rates (+0.5 points and +2.2% respectively).

Monthly results of corporate chain hotels by
country in Europe in July 2004 

Occupancy rate 07/04
Difference in Occ. rate (pts)
Average daily rates 07/04
Change in ADR (in%)
RevPAR 07/04
Change in RevPAR 

(in %)

GERMANY
60.2%
2.2
70.0
-0.7%
42.1
3.0%
AUSTRIA
73.1%
2.5
68.0
-1.4%
49.8
2.1%
BELGIUM
61.2%
1.2
71.8
-2.6%
44.0
-0.6%
ITALY
63.1%
-0.1
122.0
-1.2%
76.9
-1.4%
NETHERLANDS
65.8%
1.1
83.8
-2.7%
55.1
-1.0%
UNITED KINGDOM
80.3%
1.5
114.7
9.4%
92.1
11.4%
SPAIN
63.8%
-0.7
81.6
-7.5%
52.0
-8.5%
SWEDEN
62.5%
2.2
74.5
14.0%
46.6
18.1%
DENMARK
70.6%
4.8
110.2
4.8%
77.7
12.5%
FRANCE
70.0%
-1.0
68.9
0.3%
48.2
-1.1%
Source: MKG Consulting Database - Official statistics from hotel chains - August 2004
Average daily rates and RevPAR in Euros inclusive of tax.
* Including other countries of the 25 countries of the EU not mentioned here

Monthly results of corporate chain hotels by country
in Europe Total over 7 months at the end of July 2004

Occupancy rate 07/04
Difference in Occ. rate (pts)
Average daily rates 07/04
Change in ADR (in%)
RevPAR 07/04
Change in RevPAR 

(in %)

GERMANY
58.9%
2.8
81.3
-0.7%
47.9
4.2%
AUSTRIA
69.5%
5.4
77.3
-0.1%
53.7
8.2%
BELGIUM
64.0%
2.2
85.8
-1.5%
54.9
2.0%
ITALY
64.0%
2.3
120.3
-0.6%
77.0
3.0%
NETHERLANDS
66.2%
1.6
95.8
-2.8%
63.4
-0.4%
UNITED KINGDOM
73.7%
3.2
113.3
7.2%
83.4
12.0%
SPAIN
63.9%
-1.7
89.7
-6.7%
57.3
-9.2%
SWEDEN
59.5%
0.2
97.9
6.1%
58.3
6.4%
DENMARK
60.9%
4.6
109.4
-1.8%
66.5
6.3%
FRANCE
66.6%
0.5
70.6
2.2%
47.0
2.9%
Source: MKG Consulting Database - Official statistics from hotel chains - August 2004
Average daily rates and RevPAR in Euros inclusive of tax.
* Including other countries of the 25 countries of the EU not mentioned here

Methodology

The MKG Consulting Database contains a sample of 6,000 corporate chain hotels representing 600,000 rooms in Europe. The data, gathered monthly from each hotel, are redresses by category of the corporate hotel chain supply and by the weight of each country in the European Union.

MKG Consulting has the largest hotel database in the world outside the UDA, with a good representaion of all the hotel segments.


 
 
Contact:

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

 
Also See: In July, the Average Occupancy Rate for the French Hotel Industry Drops / MKG Consulting / September 2004
Middle East Hotel Industry Undergoes Change; Governments in the Region are Making Tourism a Priority / MKG Consulting / August 2004
Monthly RevPAR of the 25-Nation European Hotel Industry Rose by 5.2% in May 2004, Recovery Continues / MKG Consulting / July 2004
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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