STR report: Southern Europe sees hotel demand increase

The latest data from STR Global found that Southern Europe saw a demand increase of 4.2 percent year-to-date October 2014, with the highest occupancy change (+3.6 percent) of all sub-regions in Europe.

As supply showed low year-over-year growth of 0.6 percent, average daily rate (+3.7 percent) and revenue per available room (+7.4 percent) were able to pick up and display a positive performance outlook for year-end 2014 and the start of 2015.

Spain and Portugal have reported RevPAR growth since 2011. The consistent demand increase for Spain (+4.8 percent) and Portugal (+6.6 percent) positively affected all performance measures as both countries were able to achieve RevPAR increases more than 10.0 percent.

Portugal achieved the highest ADR level in seven years, with YTD October ADR reaching EUR86.32. Spain maintained a healthy balance between occupancy (+5.6 percent) and ADR (+4.6 percent), therefore RevPAR (+10.4 percent) increased to EUR65.41, compared with EUR59.25 in YTD October 2013.

Portugal is performing at a lower ADR and occupancy level than Spain; however, RevPAR in Portugal increased at a faster rate (+12.5 percent). While the two major cities, Lisbon (+9.2 percent) and Porto (+11.4 percent), mainly increased occupancy, the Algarve region had the strongest ADR (+17.4 percent).

In Spain, Barcelona has been consistently performing with high occupancy and ADR levels, with comparable performance in the past year. The Balearic Islands and Canary islands were able to strongly increase ADR by 9.3 percent and 11.1 percent, respectively. RevPAR in Andalusia increased 10.5 percent to EUR58.78 as a result of positive growth in occupancy and ADR.

The region is also seeing some notable hotel developments for the next few years: In November, Viceroy Hotel Group announced the launch of the Viceroy Algarve at Quinta da Ombria, in Portugal, set to debut in 2017. The hotel will have 147 rooms and 99 residential units. It will be designed by WATG. 

In Spain, Hard Rock International recently announced plans for the beachfront Hard Rock Hotel Tenerife, set to open in mid-2016. The company made its Europe debut in 2014 with a new resort in Ibiza. On the mainland, Fairmont is assuming management of the Hotel Rey Juan Carlos I in Barcelona and will officially rebrand the hotel Fairmont Rey Juan Carlos I, Barcelona. As part of the deal, the property will undergo a renovation this year and will remain open throughout the revitalization period.