December 2023: The European hotel industry is celebrating

While temperatures plummeted in Europe during this last month of the year, hotel performance across the continent was on the up. The many Christmas markets held in Austria, Germany and Belgium attracted millions of international visitors to the streets and hotels of Europe. Unsurprisingly, Northern and Eastern Europe stood out at the end of the year, while Southern Europe experienced a very slight slowdown.

The European hotel industry performed well in December, with an occupancy rate of 60.2%, representing an increase of 1.8 point compared to last year. Although the continent is still -2.1 points behind its pre-Covid occupancy levels, it is closing the gap further compared to November, which was still -4 points behind.

With average daily rates up by +3.3% and +23.4% compared to 2022 and 2019, the Old Continent is posting excellent RevPAR growth of +6.4% and +19.2% respectively. Once again, these increases are much higher than the previous month, when RevPAR growth compared to 2019 was “only” +11.5%.

While the upscale segment is leading the recovery in terms of occupancy, with an increase of +3.1 points compared with December 2022, it is the budget segment that stands out in terms of ADRs, with an increase in its average daily rates of around +5.1%. Conversely, the budget segment saw its occupancy rate fall by 0.8 points compared with 2022, while the upscale segment saw its ADRs fall by 0.2%. However, it is the economy and midscale segments that show the best growth in RevPAR compared to 2022, with increases of +7.7% and +7.5% respectively. The economy segment is also the best performer compared with 2019, with RevPAR up by +21.2%, followed by the upscale category, which is up by +19.3%.

All categories are still lagging behind pre-Covid levels (ranging from -2.8 points for upscale to -0.9 for economy) and all are seeing their average daily rates by more than 20%. While only Greece returned to its pre-Covid levels in November, this month it is joined by the United Kingdom (+0.5 points), Luxembourg (+1.3 points), Latvia (+1.7 points) and Poland (=). On the other hand, Portugal (-6.2 points), Belgium (-5.3 points), the Netherlands (-5.1 points) and Germany (-4.9 points) are lagging furthest behind. Furthermore, only France is recording an occupancy rate below its 2022 levels (-0.8 points).

Unsurprisingly, Austria has the highest occupancy rate (77.4%), thanks to the popularity of Vienna and its festive atmosphere in the run-up to the festive season, closely followed by the United Kingdom and its many Christmas markets (72.8%). Across the Channel, the capital is performing just as well, with an occupancy rate of 81.3%, representing an increase of +3.7 points compared to 2022 and +2.7 points compared to 2019.

Spain is ahead of Austria in terms of the rise in its average daily rates, with an increase of +10.4% compared with +9% in December 2022. Although Austria does not have the highest average daily rates in Europe (€148.6), it does lead the way in terms of RevPAR (€115.1). Austria’s growth rate for 2022 is similar to that of Germany (+16%), placing it behind Latvia (+20.3%), Spain (+18.3%) and Malta (+16.4%). The drop in visitor numbers combined with a timid rise in average daily rates (+0.3%) did not enable France to post an increase in RevPAR like the rest of Europe (-1.1%).

The duality between north-eastern and southern Europe continues at the end of 2023, with an advantage for the former during the festive season. Snow, Christmas markets and comfort food attracted more tourists to these countries than to the sunnier part of the continent during December. January should confirm this trend, with ski holidays in full swing in Europe’s mountain ranges.


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