A great 2022 summer for the European hotel industry

Despite numerous hurdles the European hotel industry seems to be overcoming every obstacle in its path. The performances are even records for some destinations that benefited from local and international tourists.

Heatwaves, fires, geopolitical and economic crises as well as lack of staff might have affected the performances in the hotels, but the demand was strong enough to maintain growth.

In July, apart from a few countries, the European hotel industry seems to have finally made a fresh start with a RevPAR of 13.9% higher than its pre-Covid level. While performance is being driven by an increase in the average price (while the average price gap was 12% between June 2019 and 2022, in July the gap rose to +20.8%), it should be noted that the occupancy rate gap is only 4.5 points below its pre-crisis level!

Greece and Portugal are leading the recovery in July with RevPAR levels up by more than 25% compared to July 2019. This month, Greece even posted a higher occupancy rate than before COVID (+1.7%) and Portugal is only 0.6 points away from its 2019 level. These destinations have indeed benefited from the return of international customers, as has France which, in third place, posted a RevPAR of +21.2% compared to 2019.

The dynamic is more moderate in the rest of Southern Europe: +19.3% in Italy and 11.5% in Spain. However, it should be noted that the Italian season also tends to start slightly later (August-September).

Further north, July was also much better than June. The Netherlands (+4.3%), Belgium (+5.8%) and Austria (+8.8%), which were still behind in June compared to June 2019, show now higher results than in July 2019 due to the increase of ADR.

Germany shows a 6.3% growth in activity while the UK maintains its growth with a RevPAR of 12.7% above its 2019 level.

Luxembourg, on the other hand, is still impacted and is struggling to regain its pre-crisis level (-10.1% RevPAR compared to July 2019) due to an ADR and occupancy rate still lower than July 2019.

Apart from Luxembourg, Eastern Europe also remains quite behind, impacted by the war in Ukraine. Difficulties persist, particularly in Latvia (-23.1%) and the Czech Republic. However, Hungary (+16.9% RevPAR) and Poland (+16.6%) are doing very well, notably due to a sharp rise in average prices (+50% and +22.5% respectively). Hungary, however, has the largest gap in OR relative to 2019 (-18.3 points).

August follows the same positive trend with France leading the way with a +23.2% of RevPAR growth fueled by a +26.6% growth in ADR, Occupancy rate being at 65.4% with -3.9 points versus 2019. Second best growth of this preliminary August assessment, Italy can count on OR with +1.4 point and ADR +20.4% to increase its RevPAR by +22.8%. Belgium also shows a good RevPAR increase with +17.5% compared to 2019 driven by prices only with +24.5% in ADR.

Behind Germany (+5.6%), The Netherlands (+4.4%) and Greece (+2.2%) are also showing RevPAR increases. Spain, which was not in the best performers in July, loses 7.7% of RevPAR with the most important occupancy drop compared to 2019: -12.9 points.

On the first 23 days of August, Brussels (+25.6%), Marseille (+30.8%), Munich (+25.7%), Nice (+31%) and Paris (+25.6%) are showing great RevPAR growth compared to 2019. Those performances are driven by a strong increase in ADR though as Lyon is the only European city of the panel to post a positive OR change of +4 points.

After this record summer, how will the hospitality go through the last months of the year?