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May 2024: Europe’s hotel industry does as it pleases

All the performance indicators are on the up again this May. While the weather continues to fluctuate and the geopolitical situation in Europe remains difficult, hotel activity in the region is once again on the up. Average prices are continuing to rise, while occupancy is resuming the upward trend seen in the first few months of the year. Spain and Greece are taking centre stage, buoyed by a quest for sunshine, while Northern Europe is still suffering from relatively cool temperatures for the season.

The occupancy rate in the European hotel industry continues to rise month on month, from 69.3% in April to 72.9% in May. However, the increase in occupancy is more timid compared to May 2023, +0.2 points, while it stands at +2.4 points compared to 2022. This slight increase contrasts with the -0.2 point fall seen in the previous month.

The increase is more visible in terms of prices, with the average daily rate up +3.9% compared to 2023 and +17.3% compared to 2022. This positive trend has been confirmed month by month since the start of 2024, with the average daily rate rising from €122.1 in April to €135.7 this month.

As a result, RevPAR in the European hotel industry is on a positive trend, up 4.2% compared to May 2023. This growth is even more marked compared to 2022, with RevPAR jumping by +21.3%.

As in previous months, the top upscale segment continues to drive this growth, with occupancy up by +2.1 points, while the economy and budget segments see their occupancy rates fall by -0.7 and -2 points respectively. The midscale segment remained stable, with a slight increase in occupancy (+0.4 points).

It should be noted, however, that only the budget segment has still not returned to its 2022 occupancy levels (-0.9 points), attesting to travellers’ desire to opt for higher-quality offers despite inflation, which continues to impact their purchasing power.

On the other hand, average daily rates rose in all categories, with the upscale segment leading the way (+3.9%), followed by economy (+3.3%) and budget (+3%). The midscale segment recorded the weakest growth, at +2.1%.

While the budget segment shows the same RevPAR as in May 2023, the upscale segment is up significantly, by +7%. The midscale and economy categories recorded smaller but equally significant increases, with +2.6% for the former and +2.3% for the latter.

While the entry-level segments once again saw their RevPAR rise in May, the upscale and midscale segments posted much stronger RevPAR growth. 

After a lacklustre April marked by a drop in visitor numbers in several destinations, the sun seems to be shining again in the European hotel industry. All the indicators are back in the green, pointing to an auspicious late spring and early summer in June. Unsurprisingly, Southern Europe continues to outperform its more northerly peers, and this trend is set to continue into the summer months ahead.

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