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Europe Market Update Q2 2015 

Spotlight Europe – Constant Currency

Market performance – RevPAR, June 2015 YTD, EUR, Constant Currency

A focus on Europe’s performance 

Hotels in Europe reported a +6.2% increase to EUR 74.03 in revenue per available room (RevPAR) levels for the June 2015 year-to-date. (EUR Constant Currency*). This was the result of both positive Occupancy (+2.7%) and average daily rate (ADR) (+3.4%) for the first six months of the year when compare to the same period in 2014. 

*Constant Currency is an exchange rate that eliminates the effect of exchange rate fluctuations. 

Europe Performance – 12 Month Moving Average

ADR and Occ, Jan 2013 – June 2015, EUR, Constant Currency

 

Europe Class Comparison 

June 2015 YTD, Occ, ADR and RevPAR, EUR, Constant Currency

 

Overall for the first six months of the year, both Occupancy and ADR increased throughout all class segments. However, the positive performance was mainly driven by the increases in ADR, which grew at a faster rate than Occupancy. 

The Midscale & Economy hotel segment continued to maintain the most significant increase of all classes in both measures, with a +6.2% growth in ADR and a +3.6% increase in Occupancy.   

June 2015 YTD Occupancy, ADR & RevPAR percentage change in EUR

Occupancy (%)

ADR (FX*)

RevPAR (FX)

ADR (CC**)

RevPAR (CC)

Europe

2.7

7.9

10.7

3.4

6.2

Eastern Europe

5.8

-4.8

0.8

6.9

13.2

Northern Europe

1.9

14.4

16.6

3.6

5.6

Southern Europe

3.6

6.6

10.4

5.4

9.2

Western Europe

2.1

4.5

6.7

1.9

4.0

*FX = Foreign Exchange Rate, **CC = Constant Currency

When eliminating the exchange rate impact towards the euro, and calculating ADR on a constant currency basis, all European sub regions indicated a positive RevPAR growth for the first half of 2015. 

Despite the weakened euro partly impacting overall ADR increases in Europe, all subcontinents managed to increase Occupancy levels compared to the same time period in 2014. The increase in Occupancy can be seen as a positive result of inbound travel into Europe, due to a benefiting currency conversion rate which particularly affected Southern and Eastern Europe.  

2015 Q2 Snapshot: Europe Countries

Occ, ADR % Chg., June 2015 YTD, in Local Currency

  • Of the selected key countries, the United Kingdom continues to remain the strongest performer in terms of Occupancy actuals (75.1%), followed by Ireland (74.8%) and Malta (71.3%).
  • For the cumulative first six months of the year, Ireland was the top performing country for RevPAR (+21.2% to EUR77.18). For the June 2015 YTD Occupancy was up +6.3%, and ADR grew by +13.9%. Hotels in Dublin mirrored this performance, with a +22.2% increase in RevPAR. GDP for the country is expected to grow by +3.7% in 2015, as the weaker euro is boosting exports. 
  • In June, Romania reported positive results in the three key performance measurements: Occupancy (+7.3% to 75.8%); ADR (+8.4% to RON328.63); and RevPAR (+16.3% to RON249.06). VAT was cut to 9% for hotel accommodation in January 2015 and, whilst too early to judge, that hotels in the country saw an increase in RevPAR by +9.6% in the first six months of the year. The value added tax in the country is set to decrease to 19% from 24% in 2016, a move which should further aid tourism.
  • Overall, Eastern European countries were the top performer for Occupancy growth in H1 2015. Slovakia (+11.9%), Croatia (+9.5%), Bulgaria (+9.2%) and Poland (+8.9%) saw strong Occupancy growth, when compared to the same period in 2014.
  • Despite the uncertainty about Greece’s participation in the Euro and the eleventh hour agreement of a third European bailout reached in July, hotels in Athens, Greece, saw a 6.2% Occupancy rise to 67.8%. This was driven by the positive performance experience in June, with Occupancy reaching 89.9%. However, ADR in the market was also fairly stable (+0.7% to EUR108.76) and RevPAR increased by +6.8% to EUR73.79 year to date. 
  • Zurich, Switzerland, reported increases in Occupancy (+1.4% to 70.3%) for the June 2015 year to date. However, RevPAR decline marginally (-0.4% to CHF167.25). ADR in the market fell by -1.8% to CHF237.94. Hotel performance in Switzerland has fluctuated due to the unpegging of the Swiss franc, which has made the destination more expensive. This was particularly felt in the regions, as June 2015 YTD results for the country were down for both ADR (-3.6%) and RevPAR (-3.5% to CHF144.18).

All ADR and RevPAR figures measured in local currencies.

Top 5 Countries Europe

In Construction Pipeline, June 2015 Report

Changes to markets

As part of our bi-annual market mapping exercise, we are going to review and revise the structure of some markets and submarkets with July 2015 processing. This includes the allocation of individual hotels to new / different markets and submarkets, where applicable. We do this to ensure minimum disruption to your data sets whilst providing the best industry data available as the sample grows and markets evolve. Several markets will reflect these changes with the July data release. Participants in those regions will be notified in a separate communication.

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