Germany's performance levels drop during a strong Q2 for Europe hotels

Hotel Mondial am Dom Cologne-MGallery by Sofitel, Germany

The European hotel industry reported positive results in the three key performance metrics during the second quarter of 2017, according to data from STR. In Europe's market in Q2 2017, occupancy increased by 2.1 percent to 75.1 percent. Meanwhile, ADR rose 4.4 percent to EUR114.10 as RevPAR rose 6.5 percent to EUR85.67, compared to the same period in 2016.

Germany

While performance was up in Europe overall, Germany did not see this positive performance in the second quarter of 2017. Compared to last year's second quarter, occupancy dropped 0.8 percent to 73.8 percent as ADR dropped 0.4 percent to EUR101.24 and RevPAR dropped 1.1 percent to EUR74.76.

Supply growth (+1.1 percent) played a role in the overall performance decrease for the country, reaching 1 percent for the first time since Q4 2014. Despite the performance at the national level, Q2 RevPAR growth was strong in Cologne (+14.9 percent) and Hamburg (+14.5 percent). Performance in Cologne was due to large events such as Art Cologne in April and the IIHF Ice Hockey World Championship in May. Hamburg’s levels received a lift ahead of the G20 summit in early July.

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Netherlands

While Germany had its pitfalls, the Netherlands attributed to Europe's positive performance. Occupancy was up 3.9 percent to 79.5 percent. ADR increased by 6.0 percent to EUR129.19 while RevPAR increase by 10.1 percent to EUR102.72.

The absolute occupancy level was the highest for a Q2 in the Netherlands since 2006. Performance growth was especially pronounced in April, with RevPAR rising by 14.2 percent. At the market level, Amsterdam reported double-digit RevPAR growth (+10.5 percent) for the quarter, due primarily to a 7.5-percent lift in ADR to EUR164.91.

United Kingdom

The United Kingdom was on par with the rest of Europe this past quarter. Occupancy was up 1.0 percent to 79.6 percent. ADR and RevPAR saw higher increases, though, with ADR up 5.2 percent to GBP94.22 and RevPAR up 6.3 percent to GBP75.05.

STR analysts note that the devaluation of the pound continues to drive inbound travel and stronger domestic tourism in the U.K. At the market level, London recorded an 8.4-percent rise in RevPAR to GBP127.33, due primarily to a 6.4-percent increase in ADR to GBP152.70. The market saw only moderate declines in occupancy following the June 3 terrorist attack at London Bridge. Performance growth soon returned and was boosted around Eid Mubarak as London typically welcomes a high volume of visitors from the Middle East during the holiday. Q2 performance growth for Regional UK was lower (RevPAR: +4.8 percent).

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