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February 2024: Europe’s hotel industry says goodbye to the winter blues

As temperatures gradually rise in February, European hotel performances are following a similar trajectory. After a lackluster January, activity is back to its 2023 level, and well above 2022 levels. While the continent is performing relatively well, Southern Europe seems to be standing out once again, with a climate that is attracting sun-seeking travelers. Nevertheless, several Northern European countries, such as the United Kingdom and the Netherlands, are performing well.

In the second month of the year, the European hotel industry recorded an occupancy rate of 60.6%, an increase of +1.3 points compared to 2023 and +19.2 points compared to 2022. These figures underline the dynamism of hotel activity on the continent, particularly compared to the previous month when the occupancy rate stood at 54.4%. This represents an increase of more than 6 percentage points, which augurs well for tourism on the Old Continent.

Although the rise in average daily rates is less marked than in January, pricing power continues to be the order of the day in the face of ongoing inflation. The average daily rate is now 110.4 euros, up +1.8% on 2023 and +22.4% on 2022.

An upturn in visitor numbers combined with a rise in average daily rates is enabling European hoteliers to continue to post strong RevPAR growth, up 3.5% on 2023 and 66.8% on 2022. RevPAR has also risen sharply compared with the previous month, from €58.8 to €66.9.

The upscale segment continues to lead the way in terms of occupancy, with an increase of +2.9 points compared to February 2023, while the occupancy rate in the budget segment plummets by -2.8 points. However, it was the economy and midscale segments that significantly outperformed the overall occupancy rate, by +1.5 points and +0.8 points respectively.

In terms of prices, it is the budget category that is showing the strongest growth this time compared to February 2023, +1.4%, closely followed by the midscale and economy segments (+1.3% and +1.2%), while the upscale segment is making do with a change of +0.4%. Furthermore, the average daily rate for midscale properties is much closer to the price on the continent, at €106.3 compared with €110.4.

Unsurprisingly, the upscale segment is recording the biggest increase in RevPAR compared with 2023, up 5.5%, while the budget category is lagging far behind all other segments, down 3.5% compared with 2023. The return in numbers of international customers, particularly from Asia, continues to benefit midscale and upscale properties.

Nevertheless, all categories saw a clear increase in RevPAR relative to 2022, with rises ranging from +25.7% for budget hotels to +77.4% for upscale properties.

After losing momentum in the first month of the year, the European hotel industry seems to have regained its dynamism in February. Despite the somewhat capricious weather and continuing inflation, business surged once again, easily surpassing the levels seen in 2022 and 2023. In particular, the month saw Southern Europe return to the forefront of the European hotel scene, while Eastern Europe, with the exception of the Czech Republic, saw much of its performance plunge into the red. With the arrival of spring and warmer weather in March, travellers should be flocking to Europe’s hotels. It remains to be seen whether the dynamics will remain the same, or whether certain countries will be able to pull out all the stops.

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