In Q2 2016, Europe's hotel industry reported nearly flat occupancy (+0.6% to 73.9%), while ADR increased by 2.1% to €114.33 ($125.64) and RevPAR grew 2.7% to €84.49 ($92.84) when compared to Q2 2015.
LONDON—Hotels in Europe recorded positive Q2 2016 results when reported in euro constant currency, according to data from STR.
Compared with the three key performance metrics from Q2 2015, Europe reported nearly flat occupancy (+0.6% to 73.9%). Average daily rate was up 2.1% to EUR114.33. Revenue per available room grew 2.7% to EUR84.49.
Performance of featured countries for Q2 2016 (local currency, year-over-year comparisons):
France reported decreases across the three key performance metrics: occupancy (-5.5% to 68.2%), ADR (-7.5% to EUR138.43) and RevPAR (-12.6% to EUR94.34). France has seen consistent performance declines due to security concerns in the country. Even a large event like the 2016 UEFA European Championship (10 June to 10 July) could not push performance into positive territory as June produced a 5.5% decrease in occupancy to 75.1% and a 5.3% drop in ADR to EUR157.13. The country’s hotel market will be monitored further after the mid-July terrorist attack in Nice.
Italy reported nearly flat occupancy (+0.4% to 72.4%). ADR in the country was down 2.2% to EUR149.98, and RevPAR dipped 1.8% to EUR108.53. STR analysts note that the absolute levels were solid, and year-over-year decreases were due to a comparison with a strong second quarter in 2015 (helped by Expo Milano). Group demand for Q2 2016 increased 4.0%, while Transient demand slipped 0.8%. At the market level, Sicily (+10.3%) reported the largest demand increase through the first six months of the year.
Turkey reported double-digit decreases in each of the three key performance metrics. Occupancy fell 23.9% to 51.0%; ADR was down 17.2% to TRY271.85; and RevPAR dropped 37.0% to TRY138.55. The country’s hotel industry has been significantly affected in both metropolitan areas and tourist regions by terrorist attacks and ongoing security concerns. Demand in both the Transient and Group segments declined more than 20.0% during the quarter. Turkey’s hotel performance will be monitored further after the attempted coup in mid-July.
The United Kingdom experienced steady results across the metrics: occupancy (-0.7% to 78.9%), ADR (+1.7 to GBP89.71) and RevPAR (+1.0% to GBP70.82). The Brexit vote occurred late in June, and STR analysts note that it is still too early to quantify the impact on U.K. hotels and the European hotel industry as a whole.
Performance of featured markets for Q2 2016 (local currency, year-over-year comparisons):
Amsterdam, Netherlands, posted increases in each of the three key performance metrics. Occupancy in the market rose 1.4% to 85.4%; ADR was up 5.0% to EUR154.22; and RevPAR grew 6.4% to EUR131.67. STR analysts credit city marketing efforts for a 10.1% year-to-date demand increase in Amsterdam. Specifically in the City Center, demand was up 11.4% during the second quarter.
Berlin, Germany, saw a 1.1% increase in occupancy to 81.2%, but a 1.1% decrease in ADR to EUR96.90 kept RevPAR flat at EUR78.72. Berlin’s surrounding areas and outer boroughs were the only submarkets to experience positive performance for the quarter, each benefiting from a decline in supply. Berlin’s ADR dropped 10.5% year over year in June to EUR100.44 mostly due to a comparison with a month in 2015 that included the UEFA Champions League Final and the European Academic of Neurology Congress.
Brussels, Belgium, experienced double-digit decreases in occupancy (-28.3% to 56.5%) and RevPAR (-28.8% to EUR64.71). ADR was mostly flat (-0.7% to EUR114.49). Transient demand was down 28.1% for the quarter following the March terrorist attack.
Lisbon, Portugal, recorded nearly flat occupancy (-0.6% to 83.3%) as well as increases in ADR (+5.6% to EUR105.40) and RevPAR (+5.0% to EUR87.76). June’s absolute occupancy (84.1%) was the highest for the month since 1998.
Europe’s performance for June 2016 (euro constant currency, year-over-year comparisons):
Europe’s results were mostly positive when compared with June 2015. The region reported a 0.7% dip in occupancy to 77.1%. However, ADR was up 1.3% to EUR119.48, and RevPAR increased 0.7% to EUR92.18.
About Constant Currency
Constant Currency methodology eliminates the effects of exchange rate fluctuations when calculating performance figures. STR utilizes Constant Currency to present the most accurate performance summary of a region comprising different local currencies. All ADR and RevPAR calculations use 31 January 2016 exchange rates.
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