STR Global looks at EMEA's hotel numbers for December and 2014

STR Global has posted its final numbers for 2014, looking at both the month of December and the year as a whole for the EMEA region.

The European hotel industry posted mixed results in year-over-year metrics for December 2014.

Highlights from key market performers for December 2014 include (year-over-year comparisons, all currency in Euros):

  • Budapest, Hungary, reported the largest occupancy increase, rising 21.3 percent to 60.5 percent. Athens, Greece, followed with a 14.5-percent increase to 45.3 percent.
  • The largest occupancy decrease was reported by Tel Aviv, Israel (-5.0 percent to 59.1 percent).
  • Three markets reported double-digit ADR increases: Manchester, England (+14.6 percent to EUR94.44); Tel Aviv (+14.1 percent to EUR178.71); and London, England (+13.1 percent to EUR179.05).
  • Moscow, Russia, reported the only double-digit ADR decrease, falling 35.0 percent to EUR83.70 during the month.
  • Budapest recorded the highest RevPAR increase during the month (+26.4 percent to EUR38.43). Athens followed with a 19.6-percent increase in RevPAR to EUR39.86.
  • Moscow reported the largest decline in RevPAR (-37.7 percent to EUR46.69).

The Middle East and Africa region, meanwhile, reported positive performance results in December. The region reported a 3.9-percent increase in occupancy to 61.9 percent, a 3.2-percent increase in average daily rate to US$183.35 and a 7.3-percent increase in revenue per available room to US$113.53.

Highlights among the Middle East/Africa region’s key markets for December 2014 include (year-over-year comparisons, all currency in U.S. dollars):

  • Three markets reported double-digit occupancy increases: Cairo, Egypt (+49.4 percent to 52.6 percent); Beirut, Lebanon (+24.3 percent to 56.3 percent); and Doha, Qatar (+15.3 percent to 74.4 percent).
  • Nairobi, Kenya, reported the largest occupancy decrease, falling 12.1 percent to 37.8 percent.
  • Abu Dhabi, United Arab Emirates, had the highest increase in ADR (+9.7 percent to US$159.85). Cairo followed with a 7.5-percent increase in ADR to US$109.04.
  • Sandton and Surroundings, South Africa, reported the largest decrease in ADR (-25.2 percent to US$93.30).
  • Four markets reported double-digit RevPAR increases: Cairo (+60.6 percent to US$57.36); Beirut (+32.4 percent to US$93.02); Doha (+23.5 percent to US$145.30); and Abu Dhabi (+20.5 percent to US$123.76).
  • Sandton and Surroundings reported the largest RevPAR decrease, falling 32.7 percent to US$43.29.

Europe in 2014
Europe's mixed results also applied to 2014 as a whole, with a RevPAR growth of 5.8 percent, one of the highest levels of growth since 2011. 2013 was a flat year for Europe with only 0.9 percent growth year-end driven solely by occupancy increases, and both years reported similar demand growth of approximately 3 percent, which resulted in occupancy growth. 2014, by comparison saw ADR improvement that was approaching 2007 levels with an achieved ADR of EUR106.09.

“Europe has yet to reach its ADR pre-recession peaks; however, it is in a much better position today for rate growth in 2015 due to stable supply, increasing demand and higher occupancy levels”, Elizabeth Winkle, managing director of STR Global, said in a statement. “There are concerns in the economy including widespread deflation, impact of Eurozone quantitative easing and continued declines in the value of the Euro,”

Year-end 2014, Europe achieved total demand of 1.1 million rooms sold, one of the highest in the last 10 years.

“Since 2011, Europe has surpassed its demand pre-recession peak, and demand growth has continued to go from strength to strength, increasing the number of rooms sold each year”, Winkle said. “Over the last four years, Europe’s international arrivals grew by more than 20 million arrivals each year. Europe commands more than half of global international arrivals, which is forecast to continue into 2015.”

“Northern Europe was the star performer among the four main regions within Europe”, Winkle said. “The region grew in occupancy and ADR, which led to a double-digit RevPAR growth during 2014.”

Winkle said the performance of the hotel sector in the United Kingdom was a major contributor to the overall growth in Northern Europe.

Winkle also pointed to Southern Europe’s hotel industry performance as a major factor in the continent’s stabilisation during 2014. “We’ve seen recovery in Greece, Spain, Portugal and limited growth in Italy,” she said.

Western Europe experienced flat performance, particularly from an ADR perspective, and reported marginal growth in occupancy.

Eastern Europe is the only region to post negative results in all three key performance indicators, and Winkle said the performance was driven by the unrest in the region and the devaluation of the Russian ruble and decreased numbers of Russian outbound travellers into Eastern European markets.

Middle East and Africa in 2014
The Middle East and Africa region also reported positive performance results through year-end 2014.

The region reported a 3.8-percent increase in occupancy to 63.3 percent, a 1.0-percent increase in average daily rate to US$165.97 and a 4.9-percent increase in revenue per available room to US$105.13.

“RevPAR growth was mostly driven by occupancy growth; however, when looking across the region it has been a very mixed picture,” Winkle said. “The Middle East has had one of the lowest supply growths in the last six years. Lower supply coupled with a 9.0-percent increase in demand, we’ve seen a positive impact on occupancy, which reached 68.8 percent. This level was last seen in 2008; although the rate perspective in U.S. dollar terms has remained flat this year and is still about US$28.00 away from its pre-recession peak in 2008. It is important to note the product offering in the Middle East has changed dramatically in the past five years with midscale and economy hotels opening in many markets, thus changing the market mix”, Winkle said.

Northern Africa achieved RevPAR growth of 15.1 percent.

“This was driven primarily by the recovery seen in Egypt, where year to date the country has experienced a tremendous RevPAR increase of 32 percent resulting from occupancy and ADR growth,” Winkle said.