heu report · they all, without exception, recorded revpar growths by +3%. globally, the revpar has...

EU Report

Europe

AUGUST 2017

H

ANALYSIS OF HOTEL RESULTS – AUGUST 2017

European hospitality is soaring

After a vibrant month of July, August has confirmed that the hospitality sector is sailing on particularly strong winds in Europe. Results have risen in all segments compared to last year, and some countries evenreach impressive heights. But not all are lifted by the same currents.The good results observed during the months of August are very telling regarding the good performances of chain hotels in Europe, and this in every country. They all, without exception, recorded RevPAR growthsby +3%.

Globally, the RevPAR has increased by 8.5% compared to last year, which carried the progression for the first eight months of 2017 to +5.7%. After a more balanced year 2016 for hotels, 2017 is definitely showingthe signs of a robust and sound recovery.

All segments have seen their performances evolve during the month of August, with results relatively similar across all ranges (between +7 and +10.5 average evolution of RevPAR). The 5* hotels has recorded thebest growth, a sign of the recovery of demand in a context of relative meager development of the supply in recent years.

As for individual countries, even though everyone is flying high, some trends must be noted. This month's champions are Belgium and Hungary, two countries with RevPAR growths of respectively +18.2% and+18.7%, while recording +12% growth YTD. But these two countries have significantly different revenues: while Belgium has kept stable rates (+1.3%) and largely improved over a poor occupancy rate results inAugust 2016 (+9.9%, which is still not enough to return to 2015's level), Hungary has known a very strong increase in ADR (due to the organization of sport and musical events, such as the Sziget), while observinga decrease in occupancy rate (-1.5 pts).

These two exceptional cases must not hide the swarm of positive results emanating from other European countries. The leaders, Greece, Netherlands, Luxembourg and France (on a lesser scale), recorded RevPARincreases of about +10%. For the Netherlands, France and Luxembourg, occupancy rate recovery explains this RevPAR growth, whereas Greece can attribute the good health of its performances to a strongincrease in its ADR.

Portugal continues its momentum from July, which sees it realize one of the main breakthroughs (+17.0% of RevPAR in YTD!), most notably with a jump in ADR (+10.9% this month and +13.1% in YTD) whichdoesn't significantly impact occupancy (-0.9 in August, and a positive YTD). Another good pupil is Poland, which, thanks to the cumulative effects of an increasing ADR and OR, experienced a very good month ofAugust (+7.3%). This makes up for relatively average growth since the beginning of the year (+3.3% of RevPAR YTD), but that compares to a year 2016 relatively rich in exceptional events (Wroclaw EuropeanCulture Capital, JMJ in Krakow).

Some countries cruise at lower altitudes. While there are no losers in August 2017, there are some poor results, like Austria, UK or Latvia, which mainly show that August is the month of leisure tourism andholidays. Italy and Spain, with respective increases in their RevPAR by 5.4% and 6.5%, have banked on successful seasons but it must be noted that Spain records one of its first decreases of occupancy in August (-0.8%) in years, in a context where the growth in ADRs remains very firm (+7.6%). Finally, in 2017 Germany improved its year with a 5.9% increase in its RevPAR, which has improved YTD results that are lower thanthe European standards (+2.8%).

On the whole, a significant improvement has benefited hoteliers in every European country. An increase in occupancy rate is not a universal rule, but where it wasn't the case, the growth of the ADR has beenenough to stimulate performances for a truly successful month of August.

EU ReportH Produced by 2


HOTEL RESULTS BY SEGMENT

IN EUROPE – AUGUST 2017

YTD RESULTS

Occupancy Rate Average Daily Rate (€ VAT excL) RevPAR (€ VAT excl)

(pts) (%) (%)

2* 1,7 2,5% 5,0%

3* 2,2 1,9% 5,2%

4* 2,6 2,4% 6,3%

5* 3,3 1,1% 6,2%

Global 2,4 2,2% 5,7%

OR, ADR and RevPAR change - Last 24 months

MONTHLY RESULTS

Occupancy Rate Average Daily Rate (€ VAT excL) RevPAR (€ VAT excl)

(pts) (%) (%)

2* 2,5 3,7% 7,2%

3* 3,1 4,0% 8,4%

4* 2,9 4,2% 8,3%

5* 4,8 3,6% 10,5%

Global 3,0 4,2% 8,5%

Note : The indicators are compared to the same period of previous year, i.e. AUGUST 2017 vs AUGUST 2016

-5%

-3%

-1%

1%

3%

5%

7%

9%

11%

13%

15%

09/15 10/15 11/15 12/15 01/16 02/16 03/16 04/16 05/16 06/16 07/16 08/16 09/16 10/16 11/16 12/16 01/17 02/17 03/17 04/17 05/17 06/17 07/17 08/17

Changes ADR Changes OR Changes RevPAR


HOTEL RESULTS BY COUNTRY


Sup. to 10%

Between 5% and 10%

Between 0% and 5%

Inf. to 0%

European

average

+8.5%

Monthly Results - RevPARchange by countryAUGUST 2017 vs AUGUST 2016

FR

+9.6%

UK

+4.6%NL

+12.3%

BE

+18.2%

DE

+5.9%

PL

+7.3%

CZ

+4.4%

HU

+18.7%

GR

+10.6%

IT

+5.4%

AT

+4.4%CH

-0.6%

ES

+6.5%

PT

+9.8%

TR

+79.2%

MT

+6.2%

LU

+13.3%

LV

+3.2%




Sup. to 5 pts

Between 2,5 and 5 pts

Between 0 and 2,5 pts

Inf. to 0 pt

European

average

+3.0 pts

Monthly Results – OccupancyRate change by countryAUGUST 2017 vs AUGUST 2016

FR

+5.0 pts

UK

+0.1 pt NL

+4.0 pts

BE

+9.9 pts

LU

+9.4 pts

DE

+1.9 pt

PL

+2.5 pts

CZ

-0.6 pt

HU

-1.5 pt

GR

+2.3 pts

IT

+2.1 pts

AT

-0.3 ptCH

+2.7 pts

ES

-0.8 pt

PT

-0.9 ptTR

+23.1 pts

MT

-2.9 pts

LV

+0.9 pt




Sup. to 10%

Between 5% and 10%

Between 0% and 5%

Inf. to 0%

European

average

+4.2%

Monthly Results - ADR change by countryAUGUST 2017 vs AUGUST 2016

FR

+1.8%

UK

+4.5%NL

+7.1%

BE

+1.3%

LU

-0.4%

DE

+3.1%

PL

+4.0%

CZ

+5.2%

HU

+20.7%

GR

+7.7%

IT

+2.2%

AT

+4.8%CH

-4.0%

ES

+7.6%

PT

+10.9%

MT

+9.7%

TR

+23.6%

LV

+2.1%




Sup. to 10%

Between 5% and 10%

Between 0% and 5%

Inf. to 0%

European

average

+5.7%

YTD Results - RevPAR change by countryYTD AUGUST 2017 vs YTD AUGUST 2016

FR

+3.3%

UK

+7.8% NL

+10.5%

BE

+12.2%

LU

+12.8%

DE

+2.8%

PL

+3.9%

CZ

+11.7%

HU

+16.7%

GR

+15.4%

IT

+5.2%

AT

+4.8%CH

-0.2%

ES

+10.3%

PT

+17.0%TR

+20.0%

MT

+11.4%

LV

+6.3%




Sup. to 5 pts

Between 2,5 and 5 pts

Between 0 and 2,5 pts

Inf. to 0 pt

European

average

+2.4 pts

YTD Results – Occupancy Rate change by countryYTD AUGUST 2017 vs YTD AUGUST 2016

FR

+3.2 pts

UK

+1.5 pt NL

+3.9 pts

BE

+7.2 pts

LU

+5.9 pts

DE

+0.9 pt

PL

-0.2 pt

CZ

+3.6 pts

HU

+3.4 pts

GR

+4.4 pts

IT

+3.1 pts

AT

+2.2 ptsCH

+1.7 pt

ES

+1.3 pt

PT

+2.6 ptsTR

+7.0 pts

MT

+0.3 pt

LV

+1.1 pt




Sup. to 10%

Between 5% and 10%

Between 0% and 5%

Inf. to 0%

European

average

+2.2%

YTD Results - ADR change by countryYTD AUGUST 2017 vs YTD AUGUST 2016

FR

-1.6%

UK

+5.8% NL

+5.0%

BE

+0.7%

LU

+4.3%

DE

+1.5%

PL

+4.2%

CZ

+5.0%

HU

+11.4%

GR

+8.2%

IT

+0.5%

AT

+1.7%CH

-2.4%

ES

+8.4%

PT

+13.1%TR

+6.5%

MT

+11.0%

LV

+4.7%


METHODOLOGY1The report presents the results of corporate brand hotels in Europe. The sample consists of a total of more than 6,500 hotels, representing more than800,000 rooms. The breakdown by segment is as follows: 30% for Budget and Economic hotels, 30% for midscale hotels and 40% for upscale hotels.

Hotels are classified according to the hotel star system: from 1* to 5*. The category of corporate chain hotels are allocated individually according to MKGHospitality’s market expertise and reflect the “marketing classification” in complement to the official rating system(s) of the country (if any). The categorybreakdowns for global supply are taken from MKG Hospitality’s database and from information provided by statistical and/or hotel industry institutions(e.g. associations, unions).

Conventions

2oOccupancy rate: Number of sold rooms divided by number of available roomsoAverage daily rate: Room revenue divided by number of sold roomsoRevPAR: Occupancy rate x average daily price or room revenue divided by available roomsoAvailable rooms: Capacity x number of operating days (within a month)oSold rooms: Capacity x number of operating days x occupancy rateoRoom revenue: Room revenue expressed net of VAT (excluding other types of revenue

such as food and beverage, etc.)

Glossary

heu report · they all, without exception, recorded revpar growths by +3%. globally, the revpar has...

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