According to an STR Global HotelBenchmark Survey, European hotels got off to a slow start in 2008, with revenue per available room (revPAR) up by only 1.1% to €68 for the first four months of the year. Although hotel performance in general is static, there are still several success stories across the continent.
Moscow achieved some of the highest revPAR results in Europe at US$255. Driven by an increase in average room rates, St. Petersburg saw strong growth with a revPAR increase of 35.9% in U.S. currency. Park Plaza Hotels & Resorts, Rezidor Hotel Group and InterContinental Hotels Group are among the companies expanding in Russia. Moscow and St. Petersburg currently have 6,184 and 2,711 new rooms, respectively, in their development pipelines.
The city of Paris hosted a number of sporting events this year, pushing occupancy past the 75% mark, while average room rates were up 10.6% to €229. The revPar growth was up 16.6%.
Jerusalem and Tel Aviv in Israel reported double-digit revPAR growth, up 20.7% and 15.0%. The Israel Ministry of Tourism saw a growth of 44% to 648,000 tourists compared with the previous year.
In Turkey, Ankara and Istanbul also reported double-digit increases in revPAR. Ankara increased 35.4%, and Istanbul was up 35.3%. Istanbul will raise its profile in 2010 when it becomes the 2010 European Capital of Culture along with Pecs in Hungary and Essen in Germany.
Cities pulling down European hotel performance were Tallinn, Baku, Dublin, Rome and Reykjavik. Tallinn, who saw a 15.6% drop in hotel occupancy, saw the largest decline in revPAR, down 16.2%. Dublin’s revPAR declined 5.6% with room occupancy dipping 6.3%. Rome and Reykjavik also saw revPAR decrease by 5.2% and 3.4% respectively.
Alex Kyriakidis, Global Managing Partner of Tourism, Hospitality & Leisure at Deloitte stated, “The UK and USA are strong source markets for Europe. With the current economic slow down and the strength of the Euro against Pounds Sterling and the US dollar, it is likely European hoteliers will see a downturn in visitor numbers from these countries. However, world tourism levels are due to increase, driven by emerging economies and the successful targeting of non-traditional source markets.”
Stated Managing Partner for Hospitality in Deloitte UK, Marvin Rust, said, “We are observing marginal decreases in occupancy across Europe suggesting there is less business to go around. However, it is promising to see that for most European cities, average room rates have seen good growth. The cities where the economy is weaker, such as Dublin and Rome, have seen the lowest increases in rates. Watch out for cities in Switzerland and Austria which will see rapid improvements in hotel performance during June when they host the UEFA Euro 2008 football tournament.”