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ΕΜΕΑ, Central/South America hotel performance for May 2017

Hotel Eden in Rome.

The hotel industry in Europe reported positive results in the three key performance metrics during May 2017, according to data from STR.

LONDON – The hotel industry in the Middle East reported negative results during May 2017, while hotels in Africa recorded mixed results in the three key performance metrics, according to data from STR.

U.S. dollar constant currency, May 2017 vs. May 2016

Middle East

  • Occupancy: -5.9% to 64.4%
  • Average daily rate (ADR): -2.5% to US$150.47
  • Revenue per available room (RevPAR): -8.2% to US$96.88

Many hotel markets in the Middle East saw negative results as a result of the Ramadan calendar shift from early June 2016 to late May 2017. 

Africa

  • Occupancy: -0.9% to 55.2%
  • Average daily rate (ADR): +11.6% to US$99.20
  • Revenue per available room (RevPAR): +10.5% to US$54.76

Local currency, May 2017 vs. May 2016

Qatar

  • Occupancy: -5.3% to 58.0%
  • ADR: -10.1% to QAR440.15
  • RevPAR: -14.8% to QAR255.08

The performance decline is primarily attributed to the Ramadan calendar shift and a comparison with non-holiday dates last year. The final six days of the month each resulted in RevPAR decreases of more than 40.0%. STR is continuing to monitor performance in the country following the 5 June announcement from several Arab nations to sever diplomatic relations with Qatar. However, it remains too early to identify any potential impact on hotel performance.

South Africa

  • Occupancy: +0.5% to 61.3%
  • ADR: +3.4% to ZAR1,115.24
  • RevPAR: +3.9% to ZAR683.20

The absolute RevPAR level was the highest for any May on record in South Africa. STR analysts note that weekday business was the main driver of growth (RevPAR: +6.4% year over year), while weekend RevPAR actually declined 4.0%. 

United Arab Emirates

  • Occupancy: -7.1% to 72.0%
  • ADR: -6.1% to AED514.33
  • RevPAR: -12.8% to AED370.43

In addition to the aforementioned Ramadan calendar shift, a 5.3% year-over-year increase in supply weighed on performance for the month. STR analysts note that corporate demand appears to be stable, with occupancy for Group bookings (bookings of 10 or more rooms at a time) up 10.4% for the month. Meanwhile, an 8.9% decline in Transient occupancy brought down overall performance. 

Europe hotel performance
The hotel industry in Europe reported positive results in the three key performance metrics during May 2017, according to data from STR.

Euro constant currency, May 2017 vs. May 2016

Europe

  • Occupancy: +3.5% to 75.6%
  • Average daily rate (ADR): +4.8% to EUR114.35 
  • Revenue per available room (RevPAR): +8.5% to EUR86.47

Local currency, May 2017 vs. May 2016

Belgium

  • Occupancy: +18.1% to 74.1%
  • ADR: +3.6% to EUR103.81
  • RevPAR: +22.3% to EUR76.94

May was the third-straight month with double-digit RevPAR growth in the country. According to STR analysts, performance recovery has been evident since November 2016 when Belgium broke a streak of eight-consecutive months with double-digit declines that followed the March 2016 terror attack in Brussels. Returning demand levels have coupled with a low rate of supply growth to push performance up considerably. Brussels, which tends to be a corporate-driven market, reports its highest performance levels on Tuesdays and Wednesdays, and May was no different. 

Italy

  • Occupancy: +1.6% to 76.1%
  • ADR: +1.2% to EUR154.97
  • RevPAR: +2.8% to EUR117.90

Although Italy recorded growth in both occupancy and ADR, this was the country’s lowest year-over-year increase in RevPAR since the beginning of the year. In terms of actual occupancy, however, this was the highest level for the month of May since 2001. Several Italian hotel markets benefitted from hosting events in May, including Verona (RevPAR +62%), which hosted a series of concerts, Bologna (RevPAR +38.5%), which hosted the annual AIC dental congress, and Venice (RevPAR +21.0%), which hosted the Biennale Arte international exhibition.

Sofia, Bulgaria

  • Occupancy: +2.4% to 66.9%
  • ADR: +14.2% to BGN155.70
  • RevPAR: +17.0% to BGN104.24

May was the eighth month in a row with double-digit RevPAR growth in the market. STR analysts note that hotelier pricing power was helped by a second-consecutive month with flat supply. Year to date, RevPAR has grown 19.4% in Sofia. 

Central/South America hotel performance
The hotel industry in the Central/South America region reported higher occupancy levels and lower average room rates year over year during May 2017, according to data from STR.

U.S. dollar constant currency, May 2017 vs. May 2016

Central/South America

  • Occupancy: +5.2% to 54.1%
  • Average daily rate (ADR): -1.5% to US$95.74 
  • Revenue per available room (RevPAR): +3.7% to US$51.78

Local currency, May 2017 vs. May 2016

Argentina

  • Occupancy: +14.9% to 57.0%
  • ADR: +22.0% to ARS1,793.66
  • RevPAR: +40.2% to ARS1,023.27

ADR growth was particularly high during the third and fourth weeks of the month. In addition to the Labour Day (1 May) and May Revolution (25 May) holidays, STR analysts cited a number of events that helped lift performance: Feria Internacional del Libro de Buenos Aires (27 April-15 May), Buenos Aires Tango Championship (10-21 May), Feria Masticar food fair (11-14 May) and arteBA (24-27 May). For the month, Buenos Aires posted RevPAR growth of 43.5% with a 20.9% lift in occupancy and an 18.6% rise in ADR. 

Brazil

  • Occupancy: +4.0% to 50.5%
  • ADR: -10.0% to BRL256.63
  • RevPAR: -6.4% to BRL129.48

The year-over-year occupancy increase was the first for Brazil in 2017. However, new supply (+4.2% year to date) pressuring absolute occupancy and ADR levels in addition to a difficult-to-match comparison from the months prior to the Rio Olympics last year created for overall negative performance, specifically in Rio de Janeiro (RevPAR: -29.5%). 

Chile

  • Occupancy: +11.9% to 63.3%
  • ADR: -2.1% to CLP77,311.48
  • RevPAR: +9.6% to CLP48,902.83

STR analysts attribute part of the overall performance growth to a lower than usual comparison base from last year. At the same time, the country has reported 12 straight months with year-over-year decreases in ADR. However, the May decrease was by far the lowest decrease during that time.

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