Europe’s hotels are going strong—or at least holding steady, according to the latest report from STR. Year-over-year, from August 2016 to August 2017, overall occupancy rose by 2.5 percent to 77.4 percent, ADR grew by 5 percent to €116.66 and ADR jumped by 7.6 percent to €90.26
The report noted three countries in particular. Belgium’s performance has risen steadily since late 2016 as the country continues to recover from the March 2016 terror attacks in Brussels. Demand increased 15.5 percent during August, while supply declined by 0.5 percent year-over-year. Occupancy jumped by more than 16 percent to 65.5 percent, ADR grew by 1.5 percent to €81.48 and RevPAR increased by 17.8 percent to €53.35.
And in spite of those terror attacks, Brussels reported a 26.8 percent increase in occupancy to 59.6 percent, while ADR was up 0.8 percent to €78.80.
Hungary has become a popular tourist destination in recent years, and the country’s ADR has been growing considerably since April. Although occupancy declined slightly year over year (-0.7 percent to 86.5 percent) as a result of supply growth (0.6 percent) and flat demand, the country’s actual occupancy level remained high. ADR grew by 22.2 percent to HUF25,874.17, while RevPAR grew by 21.4 percent to HUF22,374.13.
At the market level, Budapest reported a 1.1 percent decline in occupancy but a 23.1 percent increase in ADR for the month.
And then there’s Italy. The country’s performance growth in August was mainly driven by luxury hotels, which reported a 9.5-percent RevPAR increase for the month. Rome was the only market to report a decline in RevPAR (-11.6 percent) for the month, with ADR down 10.1 percent. STR analysts believe this was likely because the market hosted the European Society of Cardiology congress last August, but the event was held in Barcelona this year.
Overall, occupancy in Italian hotels grew by 2.2 percent to 66.9 percent, ADR increased 4.6 percent to €169.39, and RevPAR grew by 7 percent to €113.32.
Middle East & Africa
Hotels in the Middle East reported mixed performance results during August 2017, while hotels in Africa posted growth across the three key performance indicators. Overall, hotels in the Middle East saw a 3.9-percent decline in occupancy to 62.1 percent, but ADR grew by 7.4 percent to $151.04 and RevPAR increased 3.2 percent to $93.84. African hotels, meanwhile, reported occupancy growth of 2.9 percent to 61.2 percent, ADR growth of 11.7 percent to $99.78 and RevPAR growth of 15 percent to $61.09.
Egypt’s hotels continue to recover from security concerns in the country, and demand has grown by double-digits for all but one month in 2017. The country’s ADR has remained above EGP1,000 each month since November 2016, and rate growth has been primarily driven by Cairo, which posted an 83.8 percent August increase to EGP1,671.39. However, figures are quite different in U.S. dollar terms, with a 12.9 percent decline for the country and 7.6 percent decrease in Cairo. Meanwhile, Egypt’s occupancy levels benefitted from a 12.9 percent increase in demand, while supply grew only 0.4 percent compared with August 2016.
Overall, Egyptian hotel occupancy grew by 12.5 percent to 66.8 percent, while ADR increased by an impressive 73.3 percent to EGP1,233.18 and RevPAR jumped 95 percent to EGP823.70.
August marked Morocco’s fifth consecutive month of ADR growth. At the market level, Marrakech recorded a 17.5 percent increase in RevPAR, driven solely by rate growth, while Casablanca was the only market that managed to increase both occupancy and ADR, resulting in 5.6 percent growth in RevPAR. Supply growth (+3.5 percent year to date) is affecting Morocco’s occupancy levels. Additionally, the country has 28 hotel projects in the pipeline, of which, six are scheduled to open before the end of the year.
Year-over-year, Morocco’s occupancy declined 6.4 percent to 65.8 percent, while ADR grew 9.6 percent to MAD1,183.50 and RevPAR increased 2.5 percent to MAD778.21.
And then there’s the UAE, where a booming pipeline is driving competition. Hotel demand remains solid in the United Arab Emirates (+4.8 percent year-to-date), but significant supply growth (5.1 percent year-to-date) continues to pressure occupancy levels and pricing power. At the market level, both Dubai (-14.0 percent) and Abu Dhabi (-11.9 percent) reported RevPAR declines, due primarily to lower rates.
All metrics for UAE hotels were negative between August 2016 and August 2017. Occupancy dropped 5.9 percent to 68.4 percent, while ADR declined 8.3 percent to AED422.77 and RevPAR fell 13.7 percent to AED289.27.