Hotels in Europe Report October 2016 Drop in ADR, OR and RevPAR

According to October 2016 data compiled by STR, hotels in Europe reported negative results in the three key performance metrics when reported in euro constant currency.

Compared with October 2015, Europe reported nearly flat occupancy, down 0.4% to 75.3%, ADR dipped 1.6% to EUR113.51 and RevPAR fell 2.0% to EUR85.47.

Performance of featured countries for October 2016 (local currency, year-on-year comparisons):

Portugal recorded its highest ADR (EUR94.78) for the month of October since 2003 as well as its sharpest year-on-year increase in ADR (+13.0%) for any October on record. Meanwhile, occupancy increased 3.0% to 77.8%. As a result, RevPAR grew 16.3% to EUR73.72.

Slovakia posted double-digit RevPAR growth (+21.5% to EUR51.90) as a result of a 7.7% increase in occupancy to 73.7% and a 12.8% lift in ADR to EUR70.42.

The United Kingdom saw a 1.8% decline in occupancy to 80.9%. The decrease came in comparison with a record-high occupancy level for an October (2015), when the UK hosted major events like the Rugby World Cup. ADR dropped 2.9% in October 2016 to GBP91.84, and RevPAR dipped 4.7% to GBP74.29. Overall, the UK’s supply continued to grow, up 1.9% in October, while demand was flat.

Performance of featured markets for October 2016 (local currency, year-on-year comparisons):

Budapest, Hungary, posted its highest occupancy level for an October on record with a 15.5% increase to 87.7%. October also brought Budapest’s fourth highest actual ADR for any month since 1996, with an 8.8% rise to HUF27,939.28. As a result, RevPAR grew 25.6% to HUF24,515.18.

Sofia, Bulgaria, registered an actual occupancy level of 76.3% (+10.1%), the first time since October 2004 that the market achieved an occupancy level higher than 70%. The market also recorded its highest actual ADR (+9.0% to BGN148.48) since November 2009, and RevPAR grew 20.0% to BGN113.26. According to STR analysts, an increase in the number of flights from low-cost airlines such as Ryanair and Wizz Air has significantly helped hotel performance. Occupancy increased 11.4% on weekends, suggesting a large amount of leisure travel.

Zurich, Switzerland, continued to struggle, reporting an ADR of CHF217.24 (-6.0), the lowest actual ADR for an October in the market since 2004. Meanwhile, occupancy grew 0.5% to 74.4% and RevPAR dropped 5.5% to CHF161.53. STR analysts note that Zurich’s performance has been affected by a decline in business travel, as occupancy was down 1.4% during weekdays in October. ADR, on the other hand, declined across both weekdays and weekends.

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