Positive Numbers from Hotels in Europe

 According to data compiled by MKG Hospitality, the trend of European hospitality industry has been reversed, after a long series of completely negative figures, in a vast majority of countries.

The reverse is particularly noticeable in Germany, France and the United Kingdom. An increase in occupancy rates since last December combined with a recovery of ARRs, especially in France and Germany (thanks to the VAT rates modification), where they’re increasing, and also in the United Kingdom, Benelux, Switzerland and even Spain where the rate decline seems to be coming under control.

After a rather timid movement in January and February, March shows a sharp increase in Germany, France and the United Kingdom:

In Germany, the occupancy rates progression is still fragile but the fiscal boost given to hoteliers, who thus gained a 10-points margin with the decreased VAT, will could prompt them to lower the rates, which should boost the occupancy.

In France, on the national scale, the 3.5-point occupancy rates improvement might help limit the aggressive rate policies and give some slack to the budget segments, as their average rates improvement was giving signs of weakness.

In the United Kingdom, after 2 successive months of increase in January (+1.1%) and February (+2.3%), ARRs are receding slightly. The national average is actually affected by a rate decrease in the budget segment, a phenomenon that should only be temporary.

In Spain, seriously hit by overcapacity in the largest cities, has managed to increase OR by 5 points by decreasing ARR. This has lead to one of the lowest RevPARs of any European developed country.

 The situation is rather similar in Italy, 4 months of a positive OR increase are the result of a rather sharp drop in rates. But the RevPAR in Italy is still higher than in Spain. The market seems hesitant to up the rates again in case it breaks the OR increases.

Results from Portugal are completely the opposite of the general pattern. Despite a slight improvement in occupancy rates, ARRs fell when compared with March 2009 with RevPAR dropping by double digits.

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