Mixed-results for European hotel performance in 2012, but August in Olympic shape

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 “

For more information and pictures, please contact:
Flavie Baudot, press@europeancitiesmarketing.com
+33 380 56 02 00