|
News for the Hospitality Executive |
 |
Assessment of the Hotel Activity in 2008:
France Grins, but Europe Grins more.
|
February 3, 2009 - France registers a 1.9% growth in Revenue per Available Room (RevPAR) for 2008, indeed a positive result compared to 2007�s exceptional performance, which was driven by the Rugby World Cup, Paris Air Show and other major exhibitions. 2008�s good result was mainly sustained by the first semester. RevPAR evolution during the second semester declined and ended negatively, suggesting that 2009 will be a difficult year. MKG Hospitality estimates RevPAR should decrease by 6% to 9% over 2009.
Corporate chain hotel
performances per category in France
Results from January to
December 2008
Source: MKG
Hospitality Database � official hotel chains supplier �
January 2009 Average
Daily Rates and RevPAR
expressed in euros VAT included Chain
hotel RevPAR growth reaches 1.9% in 2008 in
France. This positive result is however below the average inflation
recorded
during the year (+2.8%) and shows a clear slowdown compared to 2007�s
performance (+9.1%). 2007 was no doubt an exceptional year (Rugby World
Cup,
Paris Air Show and many major exhibitions), with results comparable to
2000 phenomenal
results. 2008 is
distinguished by two phases: a good first
semester following the trend in 2007, and a progressive decline of
demand post
summer, resulting in a negative second semester. Not since 2006 has a
year�s
quarter decreased. Less growth in 2008 was anticipated due to the lack
of major
events, however the economic crisis towards the end of the summer
accelerated a
sharp drop in hotel demand. November was a particularly poor month,
confirming
the economy downturn. Upscale
hotels were particularly affected by the
economic crisis. This segment heavily relies on international
clientele, which
diminished as company�s cut back on expenses. Pricing policy
constraints further
prevented this segment to withstand the pressure, as hotel managers do
not have
the same flexibility to increase ADR in order to compensate the drop in
demand. Despite
being hit by the economic slowdown, which also
impacts domestic clientele, the Budget and Economy categories show
their
resilience, starting with the economy segment with RevPAR increasing by
4%. The
French Midscale category remained positive compared to Europe�s average. Occupancy Rates, Average
Daily Rates and RevPAR monthly variations
in France in
2008
|
|
|
Occupancy
Rate |
OR Variation (pts) |
Average
Daily Rates |
Evolution
ADR % |
RevPAR |
Evolution
RevPAR % |
|
Budget |
69.9% |
-1.3 |
40.1 |
4.7% |
28.1 |
2.8% |
|
Economy |
70.4% |
-2.6 |
75.1 |
5.5% |
52.9 |
1.7% |
|
Midscale |
65.4% |
-2.2 |
91.8 |
2.9% |
60.0 |
-0.5% |
|
Upscale |
65.0% |
-3.3 |
146.0 |
2.3% |
94.9 |
-2.6% |
|
GLOBAL |
66.4% |
-2.7 |
107.2 |
2.6% |
71.1 |
-1.4% |
Source: MKG
Hospitality Database � official hotel chains supplier �
January 2009
Average
Daily Rates and RevPAR
expressed in euros VAT included
Occupancy Rates, Average
Daily Rates and RevPAR monthly variations
in the
European Union (EU 27) in 2008
Source: MKG
Hospitality Database � official hotel chains supplier �
January 2009
Average
Daily Rates and RevPAR
expressed in euros VAT included
France
remains among the countries less hit by the
crisis. Overall, RevPAR throughout the European hotel industry
decreased by 1.4%,
a clear change in the hotel cycle. Hotel demand begun declining in
June. ADR,
which saw a slowdown in growth during the summer, also experienced a
descending
phase. With a 12.2% drop in RevPAR, November 2008 will go down as one
of the
worst months of the decade. To find a two-digit drop in European
RevPAR, one
must go back to April 2003 (-13.5%). Worse, over the last 10 years,
only two
other months have gone suffered so much. October and November 2001, due
to
9/11, experienced -13.2% and -10.7% drop, respectively.
Upscale
category suffers even more. International
cities such as London, Amsterdam or Prague are particularly affected by
the
lack of business tourism. Drop in activity has accelerated at the end
of the
second semester and demand in upscale hotels drops by -3.3 points over
the
year. The Midscale segment is also hit by this phenomenon. Evolution of
its ADR
is similar to that of the Upscale�s and cannot compensate completely
the drop
in occupancy. Budget and economy categories maintain a price policy
margin,
explaining their good performances. They too however have been hit by
the
economic slowdown. These two categories hope to benefit from the crisis
by capturing
the Mid- and Upscale segments clientele, who are more price sensitive.
Corporate chain hotels�
performances per category in European countries
Results from January to
December 2008
|
|
Occupancy
Rate |
OR Variation (pts) |
Average
Daily Rates |
Evolution
ADR % |
RevPAR |
Evolution
RevPAR % |
|
France |
68.2% |
-1.3 |
85.3 |
3.9% |
58.2 |
1.9% |
|
Germany |
63.1% |
-1.3 |
96.5 |
3.9% |
60.9 |
1.8% |
|
United Kingdom |
74.6% |
-2.3 |
132.1 |
2.2% |
98.6 |
-0.8% |
|
Spain |
62.4% |
-4.6 |
92.4 |
-0.1% |
57.7 |
-6.9% |
|
GLOBAL EU 27 |
66.4% |
-2.7 |
107.2 |
2.6% |
71.1 |
-1.4% |
Source: MKG
Hospitality Database � official hotel chains supplier �
January 2009
Average
Daily Rates and RevPAR
expressed in euros VAT included
London CBD
has a low morale and UK overall is
particularly affected by the economic slowdown � not producing the same
positive results of recent years. Like London, business hotels in the
provinces
had to lower their expectations at the end of the year. Spain is
suffering even
more by this crisis. The Upscale category, and to a lesser extent
Midscale
category, play with prices in order to stimulate demand. Italy,
suffering from
a high pricing policy, has also been pushed to decrease.
During
this difficult time, Germany, Belgium and
Northern Europe show a capacity to resist the crisis. Brussels and
Berlin are
doing more than just resisting. Germany saw a RevPAR increase similar
to
France, thanks in large to its strong exhibitions sector, particularly
in
cities such as Hanover and Dusseldorf. Germany is likely to suffer in
2009
however, due to a lack of major exhibitions and a reduction in business
travel.
2009
should confirm the reversion of the cycle. In
Germany as in UK, the last years of 2008 have seen a drop in OR and
ADR. Supported
by strong results in the Budget and Economy segments, results in France
seem OK
and show a growth in ADR in December after a catastrophic month of
November.
Reasons to
hope for a sudden change in direction
are inexistent for the European hotel industry. The business market and
MICE
segment should remain low. Leisure clientele, despite not cutting back
on their
main vacations, should be more cautious when considering additional
vacations. Short
breaks and city tourism, two strong segments over the last years, could
also see
a decline in activity in 2009.
Forecasts
for the near future look bleak. For
France, MKG Hospitality estimates a decrease in RevPAR of 6% to 9%.
Occupancy Rates, Average
Daily Rates and RevPAR monthly variations
in the United Kingdom in
2008
Occupancy Rates, Average
Daily Rates and RevPAR monthly variations
in Germany in
2008
About MKG Group
Established
in 1985 by Georges Panayotis, MKG Group has built a reputation for
solid
business expertise and substantial know-how in the
fields of tourism, lodging and food service. MKG Group meets the needs
of each
of its clients by providing the valuable analytical and decision-making
skills
necessary for success. www.mkg-group.com
Methodology
& Innovation
With a team of over 60
experienced
consultants, as well as advanced research and analytical tools and
applications, MKG Hospitality
provides unique savoir-faire in four major areas of expertise: Market
Research;
Financial Feasibility Studies; Consulting; and Sector publications.
| Contact: Mr
Georges Panayotis MKG
Hospitality Database
Department |
.
.
|
|
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.