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June & July 2023: A European summer with suspens

In June, the European hotel industry maintained the growth course it recently set, recording a 20.5% increase in activity in terms of RevPAR relative to the pre-crisis period (reference: June 2019). While ADR growth remained unabated (+24.7%), the occupancy gap was widening slightly: still 2.8 points behind vs. June 2019.

For July, between extreme heatwaves and fires, the European hotel industry has seen a new dynamic this summer. While the countries of the south of Europe (Italy, Greece, Portugal, etc.) have seen the strongest growth in terms of activity compared with the pre-covid period (RevPAR growth of over 30% compared with July 2019), it is the countries in the north-east of the continent that are driving the recovery compared with last year: Hungary, the Czech Republic, Switzerland and Austria are driving this growth, including in terms of hotel occupancy.

In June all ranges were still “benefiting” from inflation, particularly the upscale segment, which this month posted a growth differential of +30% vs. June 2019, followed by budget (+23.9%), economy (+22.8%) and midscale(+21.7%). While ADRs are clearly ahead, in terms of occupancy, all ranges are below their pre-COVID levels. Upscale is still the segment furthest behind its pre-crisis standards (-4.6 points), despite the return of foreign travelers.

In June, on a country-by-country basis, only Luxembourg (-0.7%) and Latvia (-18.4%) show negative activity performances relative to June 2019.

The good figures for June across the continent heralded good prospects for European tourism when the season were to be in full swing. Inflation and climate change certainly didn’t seem to have put an end to the desire to travel (yet).

But in July, all the countries were still below pre-COVID levels, with the exception of Greece, where occupancy is up 2 points compared with July 2019. Poland (-0.9 points vs 2019) and Italy (-1.2 points vs 2019) also reported good results in terms of occupancy.

ADRs across the continent have rocketed compared to July 2019, with many countries recording growth rates of over 30%, including Belgium (30.9%), Italy (41.2%), Portugal (38.5%), France (32.6%), Hungary (65.6%) and Greece (35.6%).

The extreme heatwave and fires that hit southern Europe did not have that much of an impact on hotel performance in July at national level, but the repercussions could be significant in the time ahead. On the other hand, countries hitherto on the fringes of the post-COVID recovery, such as the North-East (Germany, Switzerland, Czech Republic, etc.), saw a return to tourist activity in July.

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