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January 2024: a slightly chilly start to the year for the European hotel industry

The first month of 2024 seems to mark a slight slowdown in the performance of European hotels compared with December 2023. However, this year is off to a better start than 2023, with more or less marked growth in all performance indicators. Unsurprisingly, the winter period continues to benefit primarily the countries of Northern and Central Europe, while performance in the countries of Eastern Europe falls in line with temperatures.

The European hotel industry enters 2024 with an occupancy rate of 54.4%, an increase of +1.5 points compared to January 2023 and +21.9 points compared to 2022. While this slight year-on-year increase looks positive for the continent’s hotel business, occupancy levels are still down -5.8 points on the previous month.

European hoteliers are continuing to rely on pricing power to boost their performance, with the Old Continent posting average daily rates up by +3.4% and +28.2% compared to 2023 and 2022 respectively. RevPAR is following this trend, with growth of +6.3% compared to 2023 and +114.7% compared to 2022, reaching €58.8 in January.
The upscale segment is once again leading the recovery in terms of occupancy, with an increase of +3.4 points compared with 2023, while this month it is the midscale segment that is posting the strongest price increase (+3.4%). Conversely, the budget segment is the only one to record a fall in occupancy (-1.8 points) and has one of the lowest average daily rate rises, +1.6%, just behind the upscale segment (+1.4%).

Unsurprisingly, it is the upscale and midscale categories that are posting the biggest increases in RevPAR, with performances up by +8.3% and +6.5% respectively compared with January 2023. Once again, the budget segment is the only one to post RevPAR below 2023 levels (-1.8%). The economy segment is performing relatively well, even posting the second highest rate increase, +2.9%.

Nevertheless, all categories recorded RevPAR increases in the double and triple digits compared with January 2022, a month when health restrictions were still largely in force across the continent.

Only 5 countries had an occupancy rate higher than the European average: the United Kingdom (63.7%), Spain (58.8%), Luxembourg (58.4%), Italy (56.8%) and the Netherlands (56%). In addition, the UK is the only country on the continent to break the 60% barrier, continuing the good momentum that began at the end of last year.
However, it is Malta that stands out in terms of growth in visitor numbers, with a double-digit increase compared to January 2023 (+14.1 points), followed by the Netherlands and Germany, who are tied for second place (+5.4 points), with Spain rounding off the podium (+4.9 points), closely followed by Luxembourg (+4.8 points). The presence of two southern European countries at the top of the table indicates that a number of tourists were looking for warmth during the relatively cold month of January.

The Eastern European countries are seeing their RevPAR levels settle below 2023 levels, with Hungary once again in last place (-5.8%), closely followed by Poland (-5%). However, Latvia fares better than France, with RevPAR down just -1.4% compared with -1.5% in France. For its part, the Czech Republic is posting the third-best growth in Europe (+16.1%), just behind Spain (+18.6%) and Germany (+21.6%).

Although the European hotel industry is starting 2024 with better performances than in January 2023 and 2022, it is still less buoyant than in the previous month. The lack of snow in the mountain ranges, falling purchasing power among tourists and capricious weather did not allow European hoteliers to post record performances during this first month of the year. It remains to be seen whether the gradual rise in the thermostat in February will lead to more marked changes in activity.

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