A look at hotel performance around the globe
A look at hotel performance around the globe
30 AUGUST 2018 7:51 AM

Speakers from STR and Hilton examined hotel performance around the world during a session at the recent Hotel Data Conference.

NASHVILLE, Tennessee—STR’s revised U.S. forecast, released at the recent Hotel Data Conference, showed promising signs for positive performance, which is also reflected in most markets around the world. (STR is the parent company of Hotel News Now.)

During the “Global hotel performance and pipeline trends” data dive session at the conference, Aoife Roche, director of account management at STR, teamed up with Matthew Wilson, senior director of sales and revenue analytics at Hilton, to talk about hotel performance in Europe, South America, the Middle East/Africa and the Asia/Pacific regions.


(Source: STR)

Europe had a steady start to 2018 in terms of performance, Roche said. Through June, year-to-date Europe’s revenue per available room increased 5.6%, and June was the 11th consecutive month of RevPAR growth higher than 5%.

“Demand has slowed slightly in Europe from 2017 over to 2018, and that has impacted the RevPAR performance,” she said. “However, RevPAR performance still sits above the 5% mark. All in all, it’s a really cognizant picture for Europe.

Hilton has also seen steady business in line with the rest of the industry, according to Wilson, who added that group and leisure are the largest drivers for the company.

“From a continental Europe perspective, we’re getting huge tailwinds from Turkey and Russia—Russia mainly because of the World Cup,” he said.

Speaking of the World Cup, performance for hotels around the event was unexpected, Roche said. June year-to date-numbers show that Moscow in particular was affected by the event, with “65% growth in RevPAR coming in. If you compare that to the previous World Cup … Johannesburg (was up 78%) in 2010. In 2014, Rio had growth of 95% over that period,” she said.

South America

(Source: STR)

Hotel performance in Central America isn’t great, but hotels in South America are performing very well, Roche said.

“It’s a sea of green across all major markets we report on,” she said. “Supply growth has been outweighing demand since 2012 with the exception of 2014, but it has been a problem right up until (2017) when demand finally started to surpass supply growth, and you can see very clearly the growth in RevPAR (that followed).”

Brazil has seen nine months of positive average-daily-rate growth, she said, “coming from a long history of being subzero in performance.”

Roche added that not all markets are doing as well as others in Brazil. RevPAR growth in Rio is just hitting the 5% mark, she said.

Middle East/Africa
The Middle East was the only region where STR saw a decline in year-to-date RevPAR through June, Roche said. Africa has seen double-digit RevPAR growth year to date.

Roche pulled data from Doha, Qatar, and Dubai, United Arab Emirates, where performance numbers are struggling.

“So Doha (RevPAR is) down by 24% year to date and Dubai down by 7% year to date,” she said. It’s puzzling to think how Dubai has such poor performance as it’s the fourth-most visited destination in the world, Roche added, but most of the problems there are linked to supply.

Roche referred to Doha as a “double trouble” area.

“Doha is the story of a blockade and supply,” she said. “So last year (June 2017) a number of countries led by Saudi Arabia had a blockade against Qatar, and that just changed the face of the travel going into Qatar.”

International visitors declined by 23% over the course of 2017, she said, adding that occupancies are back up and a bit stable from business in countries such as China and Russia in the last six months, but “they’re not getting ADR as a result of that.”


(Source: STR)

Year-to-date data through June shows that hotel performance is a mixed bag throughout the Asia/Pacific region, according to Roche. The region is seeing growth within cities in Thailand like Bangkok and Phuket, but a couple areas such as Myanmar haven’t performed well over the last year.

Australia has seen relatively good growth over the last 12 months, Roche said. One of the big reasons RevPAR growth is not above 3% is because of the supply coming into the market.

“It is going through a development boom, and that is expected to continue,” she said.

Melbourne and Sydney are two areas of focus for hotel development, and one reason for that is the busy flight routes between the two cities. There are 150 departures between Melbourne and Sydney daily, Roche said.

Melbourne is expected to see its pipeline of rooms under contract grow 35% and Sydney expects to see 21% growth, she said.

Hilton doesn’t have too many hotels in Sydney, but the hotels the company does have there were running extremely high occupancies, Wilson said.

STR examined the ramp-up period for new hotels coming into Sydney and New York to achieve market share within their concept, Roche said.

“Sydney, you get the rates straight away,” she said. “It takes RevPAR under two years to get to the RevPAR rate. New York, however … occupancy wasn’t anywhere near Sydney. It takes up to three years to get to the occupancy levels of the competitive set.”

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