Europe saw strong RevPAR growth in November
 
Europe saw strong RevPAR growth in November
08 JANUARY 2019 9:57 AM

Morgan Stanley’s Global Hotel RevPAR Tracker showed strong RevPAR growth in Europe in November, stable growth in the U.K. and weak growth in the U.S. and the Asia/Pacific region.

January 7, 2019--RevPAR growth was strong in Europe (5.2% vs TTM 4.6%), stable in the UK (2.2% vs TTM 2.1%), but weak in the US (1.6% vs TTM 3.2%) and APAC (0.7% vs TTM 3.8%). This is broadly positive for Accor and Scandic, and negative for IHG.

US RevPAR grew 1.6% in November vs. the trailing twelve month (TTM) rate of 3.2% in October. RevPAR growth in November compares to 3.5% in October and -0.3% in September. RevPAR growth in 2018 to end November was 3.0%. Occupancy grew 0.4% in November compared to 0.8% in October, while room rates grew 1.2% in November compared to 2.7% in October. TTM RevPAR growth of 3.1% to end November is below 3.2% in October and 3.3% in September. The two-year growth rate was 5.5% in November, compared to 7.4% in October and 1.9% in September. US RevPAR is now 31% above its 2008 peak on a TTM basis (in nominal terms), with occupancy at multi-decade highs. The Upper Midscale segment (most relevant for IHG) declined 0.3% in November compared to 1.4% in October, and is up 1.5% 2018 YTD to November, weaker than the market. For 2018, Choice guides to 1-2% RevPAR growth group-wide, Marriott guides to 3% globally / 2% North America, and Hilton guides to 3-3.5% / 2.0-2.5% US (all followed by Thomas Allen). Our US team forecasts 2.9% RevPAR growth for 2018 (here), and we forecast 1.5% for IHG Americas.

UK RevPAR grew 2.2% in November vs the TTM growth rate of 2.1% in October. The RevPAR growth in November compares to 7.7% in October and -1.4% in September. RevPAR growth in 2018 to end November was 2.4%. Occupancy grew 0.8% in November (vs 2.8% in October), while room rates grew 1.4% (vs 4.7% in October). London RevPAR grew 5.7% in November, versus 13.2% in October and -3.1% in September, with occupancy growth of 2.9% and 2.7% growth in room rate. Regional RevPAR fell 0.9% in November versus 2.4% in October and -0.7% in September, with 0.1% occupancy growth offset by a 0.9% decline in room rate. UK TTM RevPAR is now up 2.3%, compared to 2.1% in October and 1.5% in September. UK RevPAR is 27% above its prior peak (in nominal terms). The two-year growth rate was 2.3% in November, compared to 8.9% in October and the 6.9% average over the last 12 months. This data is broadly neutral for Whitbread's Premier Inn, and we expect it to report -1% RevPAR for its Sept-Nov Q3 (see here).

European RevPAR grew 5.2% in November, above the 4.6% TTM growth rate in October. This compares to 8.2% growth in October and 3.3% growth in September (MKG data). RevPAR was driven by room rate growth of 3.5% (vs 6.0% in October), while occupancy grew 1.6% (vs. 2.0% in October). RevPAR growth in 2018 to end November was 4.6%. The two-year growth rate was 8.2% in November, compared to 9.9% in October, 5.0% in September and the 8.2% average over the last 12 months. The trailing 12-month growth rate was 4.8% in November, compared to 4.6% in October and 4.0% in September, and European RevPAR is now 9% above the prior peak in nominal terms, still well below UK/US relative levels (27%/31%). European RevPAR growth is still balanced between rate and occupancy, suggesting scope for further room rate increases, and this is positive for Accor.

French RevPAR rose 6.6% in November vs 12.4% in October and 10.9% in September, against strong comps. Occupancy grew 1.0% in November (2.6% in October), while average room rates increased 5.6% (9.6% in October). TTM RevPAR was up 7.8% in November, compared to 8.2% in October and 7.5% in September. RevPAR growth in 2018 to end November was 7.7%. The two-year RevPAR growth rate stood at 18.5% in November, compared to 17.2% in October and 16.3% in September, and 13.0% for the last 12 months. Since November, weekly data from STR shows a sharp slowdown in French RevPAR growth, reflecting the "gilets jaunes" protests, and December RevPAR could be negative. However, in our recent meeting (here), Accor said this had minimal impact on its business so far, as the protests have been on weekends which are less important for business travel.

German RevPAR rose 4.1% in November on weak comps, compared to 6.4% in October and 2.6% in September. Occupancy grew 1.9% (vs 1.6% in October), while room rates rose 2.1% (vs 4.8% in October). The trailing 12-month growth rate was 3.1% in November, above 2.8% in October and 2.3% in September. RevPAR growth in 2018 to end November was 2.9%. The two-year growth rate was 4.5% in November, compared to 7.1% in October and 2.3% in September, and the 6.4% average for the last 12 months.

Spanish RevPAR grew 5.6% in November, compared to 6.6% in October and -5.2% in September, with 2.4% growth in room rates and occupancy growth of 3.1%. TTM RevPAR is now down 0.1%, and RevPAR is 34% above its prior peak. The two-year growth rate was 12.0% in November, compared to 9.1% in October and 7.9% in September, and the 8.8% average for the last 12 months. RevPAR growth in 2018 to end November was down 0.7%. Spain has been slowing as holiday demand shifts back to the Eastern Med, and this is negative for Spanish hotel stocks as well as TUI’s Hotel division.

December RevPAR growth improved in Sweden and Norway but weakened in Denmark, according to data from Benchmarking Alliance. RevPAR in Sweden grew 5.0% in December on weak comps, compared to 1.4% in November and 5.6% in October and a TTM growth rate of 2.8%. The two-year RevPAR growth rate was 0.6%, below 2.8% in November and 1.7% average of the previous three months. RevPAR in Norway grew 0.9% in December against strong comps, compared to -0.3% in November and 0.8% in October and the TTM rate of 1.9%. The two-year RevPAR growth rate was 9.6% compared to 9.2% in November and an average of 8.3% in the previous three months. RevPAR in Denmark grew 1.3% in December, compared to 5.9% in November and 2.5% in October and the TTM rate of 2.1%. The two-year RevPAR growth rate was 6.4%, above 5.4% in November and an average of -0.8% in the previous three months. This takes Nordics RevPAR to roughly up 2.3% for 2018 (Sweden 2.8%, Norway 1.9%, Denmark 2.1%), and the December data is positive for Scandic.

Asia Pacific RevPAR rose 0.7% in November vs the TTM rate of 3.4% and 4.7% in October, in constant currency terms. Occupancy in October declined 1.5% while room rates rose 2.2%. RevPAR in China grew 1.0% in November (see here), compared to 3.2% in October and -0.1% in September, with 1.9% growth in room rates (vs. 1.4% in October) offset by 1.0% decline in occupancy (vs 1.8% in October). Japan local currency RevPAR grew 3.2% in November, compared to -0.5% in October and 0.3% in September, with room rate growth of 3.0% and occupancy growth of 0.3%. In Australia, RevPAR grew 1.0% in November, compared to 2.4% in October and -0.2% in September, with room rate growth of 1.7% (vs. 2.7% in October) and -0.7% in occupancy (vs -0.3% in October). Singapore was up 4.2%, India -7.3%, Malaysia -9.1% and South Korea 2.4% (all in local currency).

The above is a news release written by a third party. While HNN’s editorial mission is to produce unique content, it occasionally publishes timely, newsworthy news releases to complement in-house reporting efforts. All news releases are clearly marked as such. For questions and clarification, please contact Editor-in-Chief Stephanie Ricca at sricca@hotelnewsnow.com.

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