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January 2009 a Tough Month for Hotels in Europe

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The European hotel industry reported mixed year-over-year results when reported in U.S. Dollars, Euros and British Pounds for January 2009, according to data compiled from STR Global.

Figures for occupancy, average daily rate and revenue per available room, range from double-digit losses to double-digit gains, depending on the market and the currency used for comparison.

“January was a tough month for hotels in Europe,” said James Chappell, managing director of STR Global. “The continuing uncertainty in the financial markets across the region and the implosion of the Irish economy are real pressure on the Euro zone and Europe in general. As we have seen before, the pattern seems to be falling rate and occupancy concurrently.”

Key year-over-year market performers include (all currency figures are in Euros):

• Three key markets reported increases in two out of the three key performance measurements: Geneva, Switzerland (ADR +26.8% to EUR232.22 and RevPAR +8.5% to EUR114.51); Munich, Germany (ADR +4.5% to EUR102.16 and RevPAR +0.6% to EUR58.20); and Salzburg, Austria (ADR +6.7% to EUR107.08 and RevPAR +2.9% to EUR53.15).

• Key markets reporting occupancy decreases greater than 20% include: Amsterdam, Netherlands (-21.6% to 50.4%); Athens, Greece (-27.0% to 37.1%); Lisbon, Portugal (-21.0% to 38.5%); Prague, Czech Republic (-22.9% to 37.2%); and Venice, Italy (-21.5% to 33.9%).

• Key markets reporting increases in ADR include: Düsseldorf, Germany (+1.5% to EUR91.20); Geneva (+26.8% to EUR232.22); Lisbon, Portugal (+2% to EUR89.52); Munich (+4.5% to EUR102.16); Salzburg (+6.7% to EUR107.08); and Zurich (+0.5% to EUR153.37).

• Six key markets ended the month with decreases in RevPAR of more than 30%, including: Athens (-31.3% to EUR43.34); Birmingham, England (-30.1% to EUR37.39); Gothenburg, Sweden (-30.9% to EUR39.00); Moscow, Russia (-40.4% to EUR71.70); Reading/M4 Corridor, England (-32.1% to EUR41.18); and Venice (-31.9% to EUR40.58).

“Southern Europe, specifically Spain, Portugal and Italy, with limited market visibility and less sophisticated revenue management practices seem to be unable to hold the rates and are subsequently in effect doubling up the drops,” Chappell added. “Likewise, less mature brands led markets like Eastern Europe and are having the same issue. The next few months will continue the pattern, and hoteliers are going to have to decide between short-term relief and long-term rate strategies”

See other recent news regarding: Airlines, Aviation, Flights, Hotels, Promotions, New Hotels, Visitor Arrivals, Free Deals, Cruises, STR, Europe, January 2009

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