August 2023: the European hotel industry makes the most of summer

The fundamentals remain the same, and certain markets continue to stand out, illustrating potential fundamental changes in certain consumer profiles. Countries with a resort offer continue to see strong growth in RevPAR, while others are inviting themselves into the high summer season.

Taking all destinations together OR is stable in Europe and ADRs are up 4.3% on August 2022, giving RevPAR growth of 4.2%. In terms of occupancy, it is the midscale and upscale segments that are doing best, with +0.7 and 1.8 occupancy rates respectively compared with August 2022. However, hoteliers in these two segments are still behind in OR compared with August 2019. The budget offer is 3.2 points behind 2022 and the economy offer is losing 1 OR point. These are the two categories that have increased their average daily rates the most, with an immediate effect on their customers, who are more sensitive to price variations. The midscale (+4.6%) and upscale (+4.7%) segments are posting the best RevPAR growth, driven by both occupancy and prices. Compared with August 2019, European hoteliers are increasing their RevPAR by 18.3% and their ADRs by 25.3%. In terms of occupancy, they lag 2019 by 4.2 points.

Tourists are no longer just interested in the South

All the top performers were able to rely on better occupancy levels than in August 2022 to boost their performances, combined with strong increases in ADRs.

German and British hoteliers have opted to reduce their ADRs. Germany is entering an unfavourable economic period. As a result, RevPAR fell by 1.1%. In the UK, occupancy rose by 3.7 points, giving RevPAR growth of 4.4%.

Latvia (up 3.6 points), Luxembourg (up 1.6 points) and Spain (up 1.5 points) are also in the green in terms of occupancy.

Will yesterday’s champions be dethroned?

France is posting the biggest drop in occupancy (-2 points), while hoteliers are maintaining a 1.4% increase in RevPAR on a 4.3% increase in average daily rates.

Italy is the destination that is losing the most in OR, down 2.7 points. The 12.9% increase in average daily rates (+43.4% compared with August 2019) will have scared off certain types of customer. In addition, the weeks of intense heat must have deterred some tourists from the Mediterranean arc. The same reason, the same result for Greece, which lost 1.5 points in OR with a 3.6% increase in PM, and Portugal (-1.3 points in TO and +9.1% in PM).

It should be noted, however, that the fundamentals remain solid, with Portugal boasting the best occupancy rate

 

of all European countries, with hotels achieving 83.3% OR. The United Kingdom and Hungary follow. Greece, at the foot of the podium, fell below 80% occupancy to 78.8% OR. A disappointing level of occupancy for a destination heavily dependent on seasonal business. The Netherlands and the Czech Republic follow at 77.3%.

At a time when the European hotel sector is gradually entering a new phase for certain markets, some destinations, such as France, will be able to take advantage of a wealth of events; others, such as the countries bordering the Mediterranean and the Adriatic, will be able to try to make even better use of the season’s extremities; and finally others, such as Luxembourg and the Netherlands, will once again be able to perform well thanks to their corporate clientele.