June 2024: a warm but not overheated start to summer for the European hotel industry
The month of June was marked by the European elections and weather that was as capricious as ever, but this did not prevent the European hotel industry from continuing the positive trend of the previous month. Although occupancy levels were slightly down, the increase in average daily rates easily made up the difference.
The occupancy rate in the European hotel sector continues to rise on a monthly basis, from 72.9% in May to 77.7% this month. However, occupancy is down slightly on June 2023 (-0.8 points), as the start of this summer period has not fully matched last year’s record levels. On the other hand, visitor numbers are well and truly up on June 2022, with an increase of +1.4 points. The trend is nonetheless positive on the pricing front, with average daily rates up +2.3% on 2023 and +16.7% on 2022. This indicator also continues to rise month on month, reaching €146.9 in June compared with €135.7 the previous month.
The rise in average daily rates offset the slight fall in occupancy rates, with European hotels posting a 1.2% increase in RevPAR. This is a more moderate increase than in the previous month, but it is still indicative of a dynamic industry in a complex political and economic context. Only the upscale segment saw an increase in occupancy compared to June 2023, up 1.2 points, while the occupancy rate in the super-economy segment fell by 3.9 points. Declines were more moderate in the economy (-1.5 points) and midscale (-0.6 points) segments. The budget category is the only one not to return to its 2022 occupancy levels (-3.1 points). The opposite phenomenon can be observed in terms of average daily rates, with the upscale segment being the only one to post a fall in this respect (-0.3%), while the economy category recorded the strongest growth (+4.1%). The budget and midscale segments also saw their average prices rise, but more moderately (+1.2% and +2.4% respectively).
Economy hotels will also see the biggest rise in average daily rates between now and June 2022 (+18.5%), while the midscale segment will see the smallest increase (+14.3%). Despite a difference of just a few percentage points, all of them recorded double-digit price increases. Unsurprisingly, the economy segment leads the way in terms of RevPAR growth, with an increase of +2.1%, followed by the midscale category (+1.7%) and the upscale category (+1.3%). Despite the rise in average daily rates, the budget segment was unable to make up for its lag in occupancy, posting a fall in RevPAR of around -3.9%.
While the start of the summer period traditionally benefits southern Europe, June 2024 is a different story. While Spain is one of the main driving forces behind the dynamism of the European hotel industry during this month, Italy and Malta are following a very different trajectory. Portugal and Greece, for their part, continued to perform well, but failed to match those of Germany, Latvia and Hungary. The European hotel industry performed relatively well during this first month of summer, but there were wide disparities across the Old Continent. It remains to be seen whether the high season, which starts in July, will benefit more countries, allowing Italy and France in particular to catch up.
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