The growth in demand that Europe’s hoteliers have experienced since the lifting of Covid restrictions might be more difficult to replicate this summer – especially given the strong comparatives last year.
The Paris Olympics, the European football championship tournament across Germany and continued strong demand from US tourists all drove room rates to new heights last summer, particularly at the luxury end of the market.
“Paris did incredibly well, but perhaps only during that Olympic period,” Aoife Roche, head of data provider STR’s European sales & client services team told the International Hotel Investment Forum event in Berlin last month.
Many German cities benefited from double-digit increases in revenues per available room (RevPAR), with additional demand coming both from football fans and visitors to various trade fairs, Roche said.
The lack of replicable events this year means that room rates over the peak summer period are likely to come under pressure. RevPAR is likely to decline in a few markets in the third quarter, with “France and Germany most impacted”, Roche told the IC.
There are signs that it is already under pressure. In France, RevPAR fell by 6.3 per cent in March, as occupancy rates fell by 5.8 percentage points to below 60 per cent, according to STR’s parent company, CoStar. In the UK, RevPar was 3.1 per cent lower, with occupancy rates 2 percentage points lower at 73.3 per cent.
Weaker room rates were reflected in recent results posted by listed hotel operators. Earlier this month, Whitbread (WTB) said that overall market demand levels were softer in the year to 27 February, with “lower levels of short-lead, discretionary leisure demand”. Although UK-wide RevPAR has fallen by a further 1 per cent since, Chief financial officer Hemant Patel said a “2 percentage point outperformance against the rest of the market” meant it maintained growth.
by Michael Fahy
