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Performance of European Hotel Industry in 2017

News The year is not over yet, but it is already clear that 2017 is going to be a year of growth for hotels in Europe. The latest edition of the quarterly report by ECM-MKG Destinations Observatory only proves that. The document analyzes the state of the industry from January to September and covers such popular regions as the UK, Iberian Peninsula, Eastern Europe, and more.

One of the main metrics for hotels, the revenue per available room (RevPAR) grew by 6.1% since the start of the year. Other key metrics showed a positive shift as well. The occupancy added 2.4%, while the average daily rate (ADR) increased by 2.7%. If analyze the hospitality sector by segments, midscale and upper upscale hotels performed exceptionally well during the first nine months of 2017. Their RevPAR added 6.1% and 6.2% respectively this year.

Many experts forecasted “catastrophic” results for hotels in the UK because of the Brexit. However, the hospitality industry of the country doesn’t show any signs of slowing down. The RevPAR has added 7.1% since the start of the year. Moreover, London and Edinburgh hotels are in the top 3 destinations with the best occupancy in whole Europe. The tier one economy of the EU, Germany, has reached a lot more moderate result – the growth in RevPAR is only 2.3%. Some of the country’s gateway business cities even showed declines. Hotels in Leipzig, Frankfurt, Munich, and Nuremberg all posted negative results. Cologne, Hamburg, and Hannover hotels, in their turn, posted the RevPAR growth of 13.5%, 8.2%, and 6.2% respectively.

After a year full of challenges, Italy finally shows growth in 2017. Currently, the increase in RevPAR is 5.5%. The positive trend is mostly driven by Venice hotels (the RevPAR growth estimated 17.5%), Florence (+14%), and Bologna (+12.1%). However, the capital of the country is far from such results. The RevPAR of Rome for first nine months of 2017 is negative, -7.1%. The Iberian Peninsula benefited from a wave of tourists who decided to refrain from vacations in Turkey, Egypt, and French Rivera because of terrorist attacks. This helps Spain and Portugal to enjoy the growth in RevPAR of 10.6% and 18.3% respectively. The result of France was not so impressive - +3.7%. As usual, Paris hotels were the main reason for the country’s growth.

Many European cities managed to improve their results thanks to popular international conferences and other events. For example, Warsaw hotels had their RevPAR grow by 9.2% because of several conventions of the international level. The same applies to Madrid that has hosted a series of business meetings in 2017 and has reached the RevPAR increase of 18.6%. Valencia, Barcelona, Bilbao, Malaga – all these cities enjoyed a double-digit increase in RevPAR. Several large conventions during the first half of 2017 made this city enjoy a RevPAR growth of 23.1%.


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