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STR: EMEA, Central/South America hotel performance for Q3 2016, September 2016

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Europe reported a 0.5% decrease in occupancy to 77.7%.

LONDON - Hotels in Europe recorded positive Q3 2016 results when reported in euro constant currency, according to data from STR.

Compared with the three key performance metrics from Q3 2015, Europe reported a 0.5% decrease in occupancy to 77.7%. However, a 2.0% increase in average daily rate (ADR) to 119.17 euros resulted in revenue per available (RevPAR) growth of 1.5% to 92.58 euros.

Performance of featured countries for Q3 2016 (local currency, year-over-year comparisons):

  • Finland reported a strong quarter, mainly due to growth in ADR (+8.9% to 99.67 euros). Occupancy also increased moderately (+0.4% to 71.5%), resulting in a 9.3% increase in RevPAR to EUR71.27. The absolute ADR level was a Q3 record for the country, and although occupancy growth was muted, the actual occupancy level was Finland’s highest for a third quarter since 2011. STR analysts note that weekday occupancy increased 5.6% to 70.6%, while weekend absolute occupancy was slightly higher at 71.9%.
  • Greece reached an absolute occupancy level of 81.9% (+5.8%), the highest on record for a Q3 in the country. ADR also increased 2.2% to 144.49 euros, resulting in an 8.1% increase in RevPAR to 118.35 euros. July was Greece’s strongest growth month of the quarter, with a 9.5% increase in RevPAR, while September produced the highest occupancy level (84.3%). In September, weekday business drove performance, with 11 days of double-digit RevPAR growth during the Sunday to Thursday periods throughout the month.
  • Ireland recorded its 10th consecutive quarter of double-digit RevPAR growth. Occupancy increased 0.6% to 89.6%, and ADR grew 13.9% to 133.04 euros, resulting in a 14.5% lift in RevPAR to 119.22 euros. September was a particularly strong month for the country’s hotels, as there were only two days without double-digit growth in RevPAR. Rate growth has been the driving factor for Ireland’s continued upward trajectory, as ADR is up 15.4% year to date. Occupancy is up 1.7% during the same nine-month time period.

Performance of featured markets for Q3 2016 (local currency, year-over-year comparisons):

  • Amsterdam, Netherlands, posted declines across the three key performance indicators due to a strong comparison base. Occupancy dropped 2.4% to 85.6%; ADR fell 1.2% to 134.92 euros; and RevPAR declined 3.6% to 115.55 euros. This performance, however, follows an exceptionally strong 2015, as the market recorded an 18.9% RevPAR increase in Q3 2015. Despite an overall year-over-year performance decline, Amsterdam maintained its highest September year-to-date actual ADR (137.83 euros) since 2001.
  • Paris, France, continued to feel the effects of security concerns in the country and the July terrorist attack in Nice. The market reported double-digit drops in occupancy (-15.2% to 71.6%) and RevPAR (-13.9% to 182.35 euros), while ADR rose 1.5% to 254.55 euros. September marked Paris’ 14th consecutive month of occupancy and RevPAR declines. Contrarily, ADR has fluctuated.
  • Warsaw, Poland, recorded strong growth mainly due to a 12.1% increase in ADR to PLN293.06. Occupancy increased 2.4% to 81.0%, and RevPAR grew 14.7% to PLN237.33. In September, Warsaw reached an actual occupancy level of 88.1%, the highest absolute level for any month on record in the market. Year to date through September, Warsaw’s performance has been largely driven by Group business (bookings of 10 or more at a time), with a 47.5% year-to-date occupancy increase in the segment.

Europe’s performance for September 2016 (euro constant currency, year-over-year comparisons):

Europe’s results were positive when compared with September 2015. The region reported a 0.8% increase in occupancy to 81.0%, a 2.6% rise in ADR to 123.23 euros and 3.4% lift in RevPAR to 99.77 euros.

Middle East and Africa hotel performance
Hotels in the Middle East reported mixed Q3 2016 results, while hotels in Africa showed positive results when reported in U.S. dollar constant currency, according to data from STR.

Compared with Q3 2015, the Middle East reported a 1.6% increase in occupancy to 63.3%. However, average daily rate (ADR) for the quarter was down 9.2% to US$160.40, and revenue per available room (RevPAR) dropped 7.7% to US$101.51.

Africa experienced nearly flat occupancy (+0.2% to 58.6%). Average daily rate was up 9.0% to US$101.66, and RevPAR grew 9.2% to US$59.59.

Performance of featured countries for Q3 2016 (local currency, year-over-year comparisons):

  • Bahrain saw a 5.1% increase in occupancy to 54.0%. However, ADR dropped 7.4% to BHD76.30, and RevPAR fell 2.7% to BHD41.22. The absolute occupancy level was the best for a Q3 in the country since 2010, but the ADR decline was the steepest for Q3 since 2004. According to the Bahrain Tourism and Exhibition Authority, the country has experienced a 10% increase in tourist arrivals over the past two years and is targeting greater increases by 2018. Through nine months in 2016, hotel demand increased 5.3% in Bahrain.
  • Egypt experienced a 4.8% decrease in occupancy to 56.5%, but a 22.4% lift in ADR to EGP762.85 pushed RevPAR up 16.6% to EGP430.72. The absolute occupancy level was an improvement from the first two quarters of the year, and the ADR level was the highest for any quarter on record in the country due to high inflation.
  • Morocco posted increases in occupancy (+9.1% to 64.0%) and RevPAR (+5.2% to MAD663.92). ADR in the country fell 3.6% to MAD1,036.96. The absolute occupancy level was the highest for Morocco since Q2 2014. Year to date, Morocco’s supply is up 2.0%, which is a factor in consistent ADR decreases in the country.

Performance of featured markets for Q3 2016 (local currency, year-over-year comparisons):

  • Abu Dhabi, United Arab Emirates, reported decreases across the three key performance metrics. Occupancy fell 3.3% to 65.8%; ADR was down 6.7% to AED372.46; and RevPAR dropped 9.7% to AED245.08. STR analysts point to a 3.6% year-to-date increase in supply and the economic impact from the oil crisis as reasons behind the performance declines. The absolute ADR level was the lowest for any quarter on record in the market.
  • Lagos, Nigeria, saw a 7.9% rise in occupancy to 44.4% as well as double-digit growth in ADR (+12.6% to NGN47,000.48) and RevPAR (+21.5% to NGN20,865.08). STR analysts cite a low comparison base and a lift in leisure business as a reason behind the occupancy increase. Through the first nine months of 2016, Lagos has seen a 2.9% occupancy increase on weekends, while weekday occupancy has grown 0.7%. At the same time, ADR is up with inflation in the country.
  • Nairobi, Kenya, posted increases across the three key performance metrics: occupancy (+2.3% to 59.3%), ADR (+2.9% to KES14,958.28) and RevPAR (+5.3% to KES8,875.69). Both supply (+14.1%) and demand (+16.7%) grew by double figures for the quarter, and Q3 2016 was the only quarter this year where Nairobi saw year-over-year increases in both occupancy and ADR.

Middle East and Africa performance for September 2016 (U.S. dollar constant currency, year-over-year comparisons):

The Middle East saw negative results when compared with September 2015, whereas results for Africa were mixed.

The Middle East reported a 1.7% decrease in occupancy to 66.8%. ADR for the month was down 5.9% to US$177.83. RevPAR dropped 7.5% to US$118.75.

Africa experienced a 2.0% decrease in occupancy to 59.2%, but ADR was up 7.6% to US$99.83, and RevPAR grew 5.4% to US$59.06.

Central/South America hotel performance
Hotels in the Central/South America region recorded mixed Q3 2016 results when reported in U.S. dollar constant currency, according to data from STR.

Compared with Q3 2015, the Central/South America region reported a 3.2% decrease in occupancy to 57.1%. However, average daily rate (ADR) was up 19.0% to US$98.92, and revenue per available room (RevPAR) grew 15.2% to US$56.45.

Performance of featured countries for Q3 2016 (local currency, year-over-year comparisons):

  • Argentina saw a slight dip in occupancy (-1.6% to 57.3%), but a 54.5% spike in ADR to ARS1,602.79 pushed RevPAR up 52.0% to an all-time quarterly high (ARS918.22). The absolute occupancy level was the lowest for a third quarter in Argentina since 2012. STR analysts point to a decline in corporate business, as evidenced by an 18.7% year-over-year decrease in Contract demand, as a driving reason behind the low occupancy. Additionally, hotels in the country became expensive within Latin America due to high inflation rates. The ARS1,602.79 absolute ADR level was the second highest (Q1 2016) for any quarter on record in Argentina.
  • Brazil experienced a 5.7% decrease in occupancy to 55.0%. However, ADR was up 27.8% to BRL362.95, and RevPAR grew 20.5% to BRL199.67. The Summer Olympics and Paralympics helped Brazil achieve three national records in August: ADR (BRL493.34), RevPAR (BRL283.65) and revenue (BRL2.1 billion). At the same time, occupancy has declined in year-over-year comparisons for 10 consecutive quarters in Brazil as supply has grown by at least 2.0% in 11 straight quarters. Specifically in Q3 2016, supply increased 4.7% year over year.
  • Colombia recorded increases across the three key performance metrics. Occupancy in the country increased 2.9% to 60.6%; ADR was up 1.3% to COP261,944.73; and RevPAR rose 4.3% to COP158,754.63. Absolute occupancy in the country eclipsed 60.0% for the first quarter since Q4 2013, and RevPAR reached its highest level for Q3 since 2010. STR analysts also note that Colombia achieved its highest quarterly demand level on record (more than 2.25 million roomnights sold) as other destinations in the region struggled to fill rooms.  

Performance of featured markets for Q3 2016 (local currency, year-over-year comparisons):

  • Lima, Peru, reported an occupancy increase of 1.1% to 71.0%. ADR in the market was nearly flat (+0.1% to PEN471.67). RevPAR grew 1.2% to PEN334.72. The positive occupancy performance was the first for the Peruvian capital since Q1 2015. In addition, the absolute ADR and RevPAR levels were the highest for any third quarter on record in the market. With three consecutive months of positive occupancy performance, which followed 13 straight months with year-over-year occupancy declines, STR analysts believe that Lima is beginning to reap the benefits of tourism marketing.
  • Cartagena, Colombia, posted double-digit growth in occupancy (+25.8% to 68.9%) and RevPAR (+24.0% to COP227,243.42). ADR in the market dipped 1.4% to COP329,949.20. The absolute occupancy level was the best for any quarter in STR’s Cartagena database, which dates back to 2011. While demand increased 25.8% during the quarter, supply remained flat. STR analysts also note that the peace treaty signing event in late September played a significant role in the market’s hotel performance.
  • Cusco, Peru, recorded positive performance across the three key metrics: occupancy (+1.2% to 72.8%), ADR (+5.5% to PEN462.68) and RevPAR (+6.8% to PEN336.84). The absolute occupancy level was the highest for a third quarter in Cusco since 2011, while ADR and RevPAR were Q3 records in the market.

Central/South America region performance for September 2016 (U.S. dollar constant currency, year-over-year comparisons): Central/South America results were mixed when compared with September 2015. The region reported a 4.3% decrease in occupancy to 56.3%. ADR was up 7.3% to US$90.35. RevPAR increased 2.6% to US$50.88.

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