STR: EMEA hotels report mixed bag for January

Andaz Capital Gate Abu Dhabi
Abu Dhabi opened the Middle East's first Andaz in November. Photo credit: Hyatt Hotels Corp.

Europe’s hotel industry reported mostly positive results in the three key performance metrics during January, according to the latest data from STR.

From January 2018 to January 2019, Europe as a whole saw a 0.1 percent drop in occupancy to 58.1 percent, but average daily rate (ADR) increased 2.5 percent to €99.56. Revenue per available room (RevPAR) increased 2.4 percent to €57.81

In Barcelona, Spain, occupancy was up 6.1 percent to 60.4 percent, ADR grew 7.1 percent to €107.75 and RevPAR increased 13.6 percent to €65.08. According to STR, the market sold more room nights than any other January on record. In addition to solid weekday performance, which correlates with demand in the business-travel sector, STR analysts noted a significant year-over-year rise in weekend RevPAR that can be linked to strengthening leisure travel and further recovery from the period of declines that followed the Catalan independence referendum of 2017. 

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Paris, however, reported an occupancy decline of 5.9 percent to 65 percent, while ADR improved 7.1 percent to €204.07 and RevPAR was up 0.8 percent to €132.72. STR analysts attribute demand declines in December (-6.5 percent) and January (-4.2 percent) to ongoing so-called yellow vest protests that began back in November. The 65-percent absolute occupancy level was the lowest for a January in Paris since 2016, when the market was in decline following November 2015 terrorist attacks. Hoteliers in the market have maintained ADR growth to stabilize RevPAR, according to STR. 

While Europe was going strong, hotels in the Middle East reported negative January performance results, while hotels in Africa posted growth across the three key performance metrics. Year-over-year, the region reported an occupancy decline of 0.9 percent to 68.2 percent. ADR fell 8.9 percent to $154.18 and RevPAR dropped 9.6 percent to $105.16.

The picture was brighter in Africa, where occupancy was up 0.3 percent to 53.4 percent, ADR grew 2.1 percent to $120.06 and RevPAR improved 2.4 percent to $64.06. 

In Abu Dhabi, occupancy was up 1.9 percent to 78 percent, ADR improved 5.4 percent to AED449.72 and RevPAR grew 7.5 percent to AED350.88. Even with supply growth of 11.2 percent, Abu Dhabi achieved its highest January occupancy since 2008. STR analysts credit a 13.4 percent spike in demand to the Asian Cup football championship. 

Less than two years away from the upcoming Expo 2020, Dubai is facing declining occupancy (down 5 percent to 82 percent), ADR (down 10.9 percent to AED716.78) and RevPAR (down 15.3 percent to AED587.70.) According to STR analysts, occupancy and rate declines are to be expected for the market with a significant amount of new inventory in the pipeline ahead of the Expo. As of January, Dubai showed 170 projects in construction accounting for 48,759 rooms. At the same time, demand grew for the fourth consecutive month, and overall performance was solid during the first five days of the month thanks to New Year’s celebrations as well as  the Arabplast international trade exhibition.  

In total, the emirate is looking to have 132,000 guestrooms by the end of 2019 and 164,000 by the time the festivities get underway.