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Strong October 2019 for the European Hotel Industry

News The hospitality industry in Europe enjoyed strong results for the second autumn’s month. All major performance metrics were growing, leaving hotels across the region in the green zone in October 2019 vs. October 2018. The occupancy added 0.2% to 76.8%, and the average daily rate grew by 0.8% to 115.15 euro. The increase in these important metrics made RevPAR (revenue per available room) grow as well (+1.1% to 88.40 euro).

As usual, hotels in different cities in Europe performed differently. This concerns capital cities too. For example, Prague hotels posted strong growth in October 2019. While the occupancy remained nearly flat (+0.3% to 86.7%), the average daily rate grew significantly (+4.2% to CZK2680.45). Naturally, this caused a significant growth in RevPAR of 4.6% to CZK2322.95.

The slow growth of hotel supply is one of the reasons for the positive performance of hotels in the Czech Republic’s capital. The hotel pipeline in Prague is modest compared to other European capitals – only 2.1%. That being said, the city becomes increasingly popular with foreign guests. Prague enjoyed as many as 7.9 million overnight visits in 2018, and their number is only expected to grow in 2019.

Another important European tourist destination, Barcelona, also had a positive month. Even though the occupancy in Barcelona hotels was declining (-2.0% to 83.2% in total), local hotels managed to increase their average daily rate by 9.1% to 155.88 euro. The increase in price helped to offset the damage done by lower occupancy, and so RevPAR of hotels in Barcelona remained positive in October 2019 - +6.9% to 129.99 euro. The daily rate level is currently the highest for all Octobers on record. There are several reasons for this. In October, Barcelona hosted a number of important events that brought many guests to the city. These are the European Association of Nuclear Medicine 2019 held on October 12016 and the United European Gastroenterology Week held on October 19-23.

While hotels across Europe post growing results, it may be harder for them to maintain their profit levels in the future as the European hotel construction pipeline is growing, reaching the result of +44.3% in October 2019. Currently, there are 1,620 hotels in construction with a total of 205,383 rooms in Europe. Four European countries have a pipeline of more than 8,000 rooms. These are Germany (51,544 rooms), the United Kingdom (40,867 rooms), Spain (26,166 rooms), and France (8,247 rooms).


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