European hotel trends – January 2025: Growth in the South, surge in the East by MKG Consulting
The European hotel market in January 2025 presented a varied landscape, with regions experiencing both growth and challenges. While Southern and Eastern Europe stood out for their strong performance, while in other markets like Germany there were signs of contraction.
Southern and Eastern Europe led growth, with Spain (+8.5%), Italy (+6.3%), and Portugal (+6.8%) seeing solid RevPAR increases, supported by stable occupancy and higher ADR. Eastern Europe also performed well, with Latvia (+33.5%), Hungary (+19.8%), Poland (+13.9%), and the Czech Republic (+12.3%) benefiting from increased tourism and business travels. In contrast, Germany experienced a 3.2% RevPAR decline, reflecting continued market challenges.
Among hotel segments, the Upscale category led with 6.9% RevPAR growth, while the Midscale segment saw more moderate gains. These trends highlight varying market conditions as the sector adapts to changing demand.
Upscale segment leads market performance
The Upscale segment stood out in January 2025, with 6.9% RevPAR growth, driven by a 1.9-point increase in occupancy to 56.2% and a 3.2% rise in ADR. This reflects strong demand for premium accommodations, a trend likely to continue throughout the year. The Midscale segment also showed positive performance in January 2025, with RevPAR rising by 1.5%, supported by a 0.5-point increase in occupancy to 55.6% and a 1.5% rise in ADR.
In January 2025, the European hotel market showed mixed results, with strong growth in Southern and Eastern Europe contrasting with stability or decline in other regions. Spain, Portugal, and Italy benefited from higher ADR, while Eastern Europe, led by Hungary, Poland, and Latvia, attracted travelers seeking affordable alternatives. The Upscale segment outperformed, reflecting strong demand for premium stays, while the Midscale segment experienced moderate growth.
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