How Europe’s hotels are REALLY performing
After the success of the first edition in Prague in April, Availpro took the Hotel Tech Lab to the UK in May
The second edition staged at The Hoxton, Holborn, in London on May 16 explored the theme of “Fresh Trends in Hospitality”. The event attracted another full house of hoteliers, all eager to draw on the insights of six expert speakers – including James Parsons, head of business development, hotels, at STR, a global consultancy and research firm
Speaking at the Hotel Tech Lab, Parsons reported a strong performance for hotels across Europe in 2017 Q1, with average occupancy of 63.5% (up 4.1%), Average Daily Rate (ADR) of £100.9 (up 2.3%) and RevPAR of £64.1 (up 6.5%), aided by demand growth of 4.8%.
The stellar performers have been Lisbon, Barcelona and Madrid, each recording double-digit RevPAR growth for the past three years. Parsons also reeled off a long list of cities, including Warsaw, Dublin, Edinburgh, Manchester, Frankfurt and Berlin, that have all enjoyed record-breaking absolute RevPAR values. There are encouraging signs elsewhere, not least for Paris, a city blighted by terrorist attacks and where occupancy still stands at a relatively low 67%, but 16% RevPAR growth makes for happier reading.
After a tough 2016, London has had a pretty spectacular start to 2017, with 4.7% rise in occupancy, 5.7% rise in ADR and a 10.7% RevPAR increase, and every sector from economy to luxury hotels experiencing significant gains. “In April, RevPAR rose to £119.40,” reported Parsons. “January, February, March and April all had records for RevPAR. These are the best numbers we have seen, and our numbers go back to 1993/94.”
Drilling down into these figures by geographical submarket, Parsons noted that Docklands/Greenwich suffered in 2016 due to a big increase in supply. But in Q1, this area has bounced back with double-digit percentage rises in ADR and RevPAR, putting it six percentage points ahead of where it was in 2015. London West End enjoyed the greatest gains (17.2% rise in RevPAR), but the picture across all submarkets is positive.
STR’s research indicates that Brexit and the weaker pound is the key driver of this growth, with visitor numbers from places like South America going up markedly as a trip to Britain becomes more affordable. Delegates also reported rising numbers of US visitors to their hotels.
Compression analysis shows that in March 2016 and 2017, London had no weekend days where occupancy was over 90%, but the total amount of weekend days where occupancy was 80-90% in March 2017 was 83% up on the March 2015 figure.
‘Over the past five years, London has added an average 3% supply every year,’ he noted. ‘STR track 183 hotels in the whole of London and there are 16,912 extra rooms in the pipeline during the next three years. Last April, the demand in London was just over 3 million rooms. The demand this April is 3.25m, so demand is up hugely, too.’
Parsons concluded an optimistic presentation by revealing that STR had just revised their 2017 RevPAR growth forecast for London up from 4% to 7% (from 6.3% growth for mid-scale economy up to 9.7% for upper upscale), with RevPAR reaching £125 and average occupancy of 83%.
For the full event recap, read here
Stay tuned for more updates from further speakers!