In 2015, hotels in Europe reported a 7.1% increase in revenue per available room (RevPAR) from 2014 to €78.68. This was a result of growth in occupancy (+2.3%) and average daily rate (ADR) (+4.6%). A weakened euro has partially contributed to overall ADR increases in Europe. However, occupancy has increased in several key European markets.
This increase in occupancy may be a result of inbound travel to Europe, which has seen a recent boost due to a beneficial currency conversion rate, particularly affecting Southern and Eastern Europe.
Although the terrorist attacks in Paris and other threats throughout Europe had notable impacts on the hotel markets in Paris and London, other major markets in Europe appear to remain relatively stable, with many markets reporting positive year-end results. For the month of December, Europe as a region reported a 0.6% increase in occupancy to 59.1%, a 2.4% increase in ADR to €105.36 and a 3.1% increase in RevPAR to €62.30, compared with the same month in 2014.
According to the February 2016 edition of the ‘STR Global Hotel Market Forecast’ (covering 29 markets across Europe), Düsseldorf and Munich will experience the steepest increases in RevPAR in 2016, driven by the return to international congresses and fairs in the markets.
Milan, on the other hand, will be influenced by the comparison with the stellar Expo year in 2015, which will weigh on this year’s performance.
The slowdown in performance for London hotels is the result of a drop in demand following the terrorist
attacks in Paris and other recent threats throughout Europe, which will temporally dent performance for the city, which, however, remains one of the top world destinations.
