Olympics creates European hotel halo-effect but occupancy is declining, says report

A report by MKG hospitality has revealed a mixed performance for European hotels in the first half of 2012, but some strong performances in August, around the Olympics.

Olympics creates European hotel halo-effect as occupany declines
Olympics creates European hotel halo-effect as occupany declines

Olympic boost

The UK took advantage of the effect of the Olympics with an average rate of £137, up 36.3% on last August's levels. RevPAR rose 35.8% to £117.7 in London in the month of August.

However, the Olympics did not result in a higher occupancy rate, due to displacement factors in July during the games.
 
Garry White, CEO of European Cities Marketing, said: "The results show that we are now in a highly competitive environment to attract business and meetings to European Cities and that successful bids for major events and international meetings can make the crucial difference in annual hotel occupancy rates. Given the economic backdrop an increase of 5.7% in August RevPAR is an excellent and encouraging result for the industry "

 In August, European hotels demonstrated an average 5.7% growth in revenue per available room (RevPAR) but overall the trend for the year – from January until the end of August – was a decrease in occupany rates.

Vanguélis Panayotis, director of development MKG Group, said: "The overall trend is in fact a decrease in occupancy rate – although it remained high for August – combined with a fairly contrasting change in average daily rates depending on geographic areas. The Olympic Games in London and the German exhibition and fair market successfully brought indicators into the green, while the majority of European countries struggled with the impact of the economic crisis."

Elsewhere

German cities recorded positive results thanks to "well-developed" business and MICE activity. With Berlin, Dusseldorf and Munich performing well, with the latter city hosting the annual Congress of the European Society of Cardiology with 30,000 participants during four days.

Copenhagen recorded an increase in RevPAR of 2.4% whilst Helsinki increased by an impressive 8.3%. However, performances in Sweden and Norway followed a reverse trend.

Barcelona and Bilbao buck the downward trend

The economic downturn in Spain impacted hotel performance throughout the country with the exception of Bilbao (which increased 2.5%) and Barcelona where RevPAR increased by 6.4%. Occupancy rate in Madrid was down by nearly three points, whereas in Seville, the drop was four points and in Zaragoza 5.6 points.

The Italian hotel industry also encountered decreased demand with all markets showing a negative variation in occupancy rate, especially in Venice with a decrease of 8.6% and Florence with a 4.6 points decrease.

 

 


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