Hotels in the Middle East reported mixed performance results during August 2017, while hotels in Africa posted growth across the three key performance indicators, according to data from STR. Hotels in the Central/South America region reported nearly flat occupancy with year-over-year rate declines during August 2017.
LONDON – Europe’s hotel industry reported positive results in the three key performance metrics during August 2017, according to data from STR.
Euro constant currency, August 2017 vs. August 2016
Europe
Countries of focus: Belgium, Hungary and Italy
- Occupancy: +2.5% to 77.4%
- Average daily rate (ADR): +5.0% to EUR116.66
- Revenue per available room (RevPAR): +7.6% to EUR90.26
Local currency, August 2017 vs. August 2016
- Belgium
- Occupancy: +16.1% to 65.5%
- ADR: +1.5% to EUR81.48
- RevPAR: +17.8% to EUR53.35
Belgium’s performance has risen steadily since late 2016 as the country continues to recover from the March 2016 terror attacks in Brussels. Demand (rooms sold) increased 15.5% during August, while supply (rooms available) declined 0.5% year over year. Brussels posted a 26.8% increase in occupancy to 59.6%, while ADR was up 0.8% to EUR78.80.
Hungary
- Occupancy: -0.7% to 86.5%
- ADR: +22.2% to HUF25,874.17
- RevPAR: +21.4% to HUF22,374.13
STR analysts note that 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 as a result of supply growth (+0.6%) and flat demand (+0.0%), the country’s actual occupancy level remained high. At the market level, Budapest reported a 1.1% decline in occupancy but a 23.1% increase in ADR for the month.
- Italy
- Occupancy: +2.2% to 66.9%
- ADR: +4.6% to EUR169.39
- RevPAR: +7.0% to EUR113.32
Italy’s performance growth in August was mainly driven by the Luxury class, which reported a 9.5% RevPAR uplift for the month. Rome was the only market to report a decline in RevPAR (-11.6%) for the month, with ADR down 10.1%. 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.
Hotels in the Middle East reported mixed performance results during August 2017, while hotels in Africa posted growth across the three key performance indicators, according to data from STR.
U.S. dollar constant currency, August 2017 vs. August 2016
Middle East
Countries of focus: Egypt, Morocco and United Arab Emirates
- Occupancy: -3.9% to 62.1%
- Average daily rate (ADR): +7.4% to US$151.04
- Revenue per available room (RevPAR): +3.2% to US$93.84
Africa
- Occupancy: +2.9% to 61.2%
- Average daily rate (ADR): +11.7% to US$99.78
- Revenue per available room (RevPAR): +15.0% to US$61.09
- Local currency, August 2017 vs. August 2016
Egypt
- Occupancy: +12.5% to 66.8%
- ADR: +73.3% to EGP1,233.18
- RevPAR: +95.0% to EGP823.70
Egypt’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% August increase to EGP1,671.39. However, figures are quite different in U.S. dollar terms, with a 12.9% decline for the country and 7.6% decrease in Cairo. Meanwhile, Egypt’s occupancy levels benefitted from a 12.9% increase in demand, while supply grew only 0.4% compared with August 2016. 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.
Morocco
- Occupancy: -6.4% to 65.8%
- ADR: +9.6% to MAD1,183.50
- RevPAR: +2.5% to MAD778.21
August marked Morocco’s fifth consecutive month of ADR growth. At the market level, Marrakech recorded a 17.5% 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% growth in RevPAR. STR analysts note that supply growth (+3.5% 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.
United Arab Emirates
- Occupancy: -5.9% to 68.4%
- ADR: -8.3% to AED422.77
- RevPAR: -13.7% to AED289.27
STR analysts note that hotel demand remains solid in the United Arab Emirates (+4.8% year to date), but significant supply growth (5.1% YTD) continues to pressure occupancy levels and pricing power. At the market level, both Dubai (-14.0%) and Abu Dhabi (-11.9%) reported RevPAR declines, due primarily to lower rates.
Central/South America hotel performance
Hotels in the Central/South America region reported nearly flat occupancy with year-over-year rate declines during August 2017, according to data from STR.
U.S. dollar constant currency, August 2017 vs. August 2016
Central/South America
Countries of focus: Brazil, Ecuador and Peru
- Occupancy: +0.6% to 58.0%
- Average daily rate (ADR): -25.0% to US$99.09
- Revenue per available room (RevPAR): -24.5% to US$57.48
STR analysts note that the steep ADR decline was due mostly to numbers in Brazil and a comparison with the month of the 2016 Summer Olympics in Rio. Brazil represents a large portion of the region’s hotel supply.
Local currency, August 2017 vs. August 2016
Brazil
- Occupancy: -4.3% to 54.7%
- ADR: -46.6% to BRL263.45
- RevPAR: -48.9% to BRL144.04
Due to the aforementioned Olympics comparison, Rio de Janeiro reported a 40.6% drop in occupancy and a 73.4% decline in ADR. At the same time, Sao Paulo hotels managed to grow both metrics for the month, resulting in a 19.0% increase in RevPAR. STR analysts note that supply growth will likely continue to affect Brazil’s hotel performance. The country added a significant amount of new rooms over the past several years due to the 2014 FIFA World Cup and the Rio Olympics, and the current pipeline represents 12.5% of Brazil’s existing room inventory.
Ecuador
- Occupancy: +5.5% to 61.7%
- ADR: -2.0% to US$94.18
- RevPAR: +3.4% to US$58.12
Occupancy has grown year over year during each month in 2017, but Ecuador’s rates have fallen in all but one month since February 2015 due to the country’s economic recession. Oxford Economics projects that the country’s moderate economic recovery during the first half of 2017 will slow for the remainder of the year, with declines expected for 2018. August hotel demand was strong in Quito, and occupancy was up 17.9% compared with the same month last year. STR analysts note that the June earthquake has not had a noticeable effect on hotel performance.
Peru
- Occupancy: +2.3% to 71.0%
- ADR: -2.9% to PEN429.07
- RevPAR: -0.7% to PEN304.44
Following a 6.1-magnitude earthquake on 13 August, Peru’s ADR declined year over year for each day remaining in the month. Cusco was the only major Peruvian market to post significant RevPAR growth (+9.7%) in August, mainly driven by an increase in Transient demand. According to STR’s latest pipeline figures, the country’s current number of rooms under contract represents 16.2% of its existing hotel supply.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
