Hotels in the Middle East reported negative results during July 2017, while hotels in Africa recorded growth across the three key performance metrics, according to data from STR.
LONDON – Europe’s hotel industry reported positive results in the three key performance metrics during July 2017, according to data from STR.
Euro constant currency, July 2017 vs. July 2016
Europe (Countries of focus: Poland, Spain and Turkey)
- Occupancy: +2.6% to 78.5%
- Average daily rate (ADR): +4.3% to EUR118.30
- Revenue per available room (RevPAR): +7.0% to EUR92.84
Local currency, July 2017 vs. July 2016
Poland
- Occupancy: +1.5% to 78.2%
- ADR: -1.6% to PLN285.62
- RevPAR: -0.1% to PLN223.39
Demand outpaced supply in terms of growth in Poland, helping occupancy growth compensate for the decline in ADR. Warsaw recorded a 10.1% increase in RevPAR for the month, with occupancy up 8.0% and ADR up 1.9%. STR analysts note that the Polish capital’s performance was exceptionally high during the first six days of the month when it hosted the International Theatre Schools Festival.
Spain
- Occupancy: -0.6% to 80.7%
- ADR: +7.7% to EUR129.34
- RevPAR: +7.1% to EUR104.33
The country’s ADR level was significantly lifted by Madrid (+13.3%) and Barcelona (15.5%). STR analysts note that it is still too early to identify a potential impact on hotel performance from the 17 August terror attack in Barcelona.
Turkey
- Occupancy: +64.9% to 69.2%
- ADR: +8.9% to TRY330.83
- RevPAR: +79.5% to TRY229.04
Turkey’s hotel performance showed dramatic year-over-year increases due to a comparison with the month of the coup d’etat attempt in 2016. Istanbul saw a 132.5% increase in RevPAR for the month, with occupancy up 97.0% and ADR up 18.0%. STR analysts expect a similar growth pattern for August as performance declines continued through that month last year.
Middle East and Africa hotel performance
Hotels in the Middle East reported negative results during July 2017, while hotels in Africa recorded growth across the three key performance metrics, according to data from STR.
U.S. dollar constant currency, July 2017 vs. July 2016
Middle East (Countries of focus: Bahrain, Nigeria and Saudi Arabia)
- Occupancy: -2.8% to 56.1%
- Average daily rate (ADR): -16.1% to US$134.00
- Revenue per available room (RevPAR): -18.4% to US$75.20
Africa
- Occupancy: +6.9% to 60.7%
- Average daily rate (ADR): +9.3% to US$97.81
- Revenue per available room (RevPAR): +16.8% to US$59.34
Local currency, July 2017 vs. July 2016
Bahrain
- Occupancy: -1.0% to 49.3%
- ADR: -11.5% to BHD64.91
- RevPAR: -12.4% to BHD32.03
Following performance increases in June boosted by post-Ramadan celebrations, Bahrain hotels saw sharp declines in July. Those decreases fell more in line with recent trends in the country, as RevPAR through July was down 6.9% compared with the first seven months of 2016.
Nigeria
- Occupancy: +12.1% to 47.9%
- ADR: +5.8% to NGN48,490.15
- RevPAR: +18.5% to NGN23,230.78
July was Nigeria’s strongest month thus far in 2017 thanks to a 16.7% increase in demand. According to STR analysts, strong events business in Lagos boosted occupancy and rate growth. Group (bookings of 10 or more rooms) RevPAR in the country rose 58.3% during the month.
Saudi Arabia
- Occupancy: -5.2% to 48.0%
- ADR: -31.6% to SAR625.78
- RevPAR: -35.2% to SAR300.14
Saudi Arabia’s performance declines followed a weak first half of 2017, and July year-to-date RevPAR is down 15.1%. STR analysts note that although the country’s hotel performance is typically lower during the summer months, the double-digit declines for July 2017 reflect the impacts of low oil prices and high hotel supply growth.
Central/South America hotel performance
Hotels in the Central/South America region reported positive results in the three key performance metrics during July 2017, according to data from STR.
Countries of focus: Argentina, Chile and Colombia
U.S. dollar constant currency, July 2017 vs. July 2016
Central/South America
- Occupancy: +3.2% to 58.1%
- Average daily rate (ADR): +0.2% to US$97.86
- Revenue per available room (RevPAR): +3.5% to US$56.83
Local currency, July 2017 vs. July 2016
Argentina
- Occupancy: +8.6% to 62.3%
- ADR: +25.6% to ARS1,964.17
- RevPAR: +36.5% to ARS1,222.96
This marked Argentina’s highest actual occupancy level for the month of July since 2011. According to STR analysts, an increase in flight options to the country and South America as a whole should continue to help the market’s hotels. Buenos Aires recorded a 14.2% lift in demand for July, its third consecutive month of double-digit demand growth.
Chile
- Occupancy: +4.1% to 72.5%
- ADR: +1.0% to CLP76,710.70
- RevPAR: +5.1% to CLP55,599.85
Chile’s performance was driven primarily by weekend business, with occupancy up 5.7% compared with a 2.9% increase for weekdays, indicating uplift in leisure bookings. Through the first seven months of the year, the country’s ADR was down 5.7%, in line with a weakened economy due to a drop in the global price of copper. STR analysts note that Chile’s economy is expected to gain momentum in the second half of 2017, with a recovery in mining investment. The country currently has 22 hotel projects in the pipeline, accounting for 3,325 rooms.
Colombia
- Occupancy: +2.9% to 56.5%
- ADR: +2.0% to COP257,456.14
- RevPAR: +5.0% to COP145,558.86
July marks Colombia’s second month of RevPAR growth in 2017, including a 9.1% increase in May. The market has experienced a last-minute influx in supply development as the government’s tax break window for hotels built between 2003 and 2017 draws to a close. STR analysts note that the country’s June peace settlement with the Farc rebels could help stimulate hotel demand in the long term.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
