European chain hotels market review – February 2009

Mar 31, 09 | 1:58 am

Hamburg shows stability

There was a mixed performance in February across Europe's key city hotel markets, according to the latest European HotStats survey by TRI Hospitality Consulting.

The Hamburg chain hotel market remained stable in February, reporting a 2.3 percentage point increase in average occupancy to 68.1 per cent, contributing to a slight uplift in RevPAR to €74.05. Demand was fueled by a successful edition of Reisen Hamburg, the international tourism and caravaning trade fair, which was attended by more than 71,000 visitors.

Also in Germany, the Berlinale international film festival enabled the capital's average room rate to surpass the historically more expensive cities of Paris, London and Amsterdam. Although down on last year by 7.4 per cent, in absolute terms, Berlin had the highest average room rate in the survey at €152.31.

The London market stayed comparatively resilient, reporting a minimal year-on-year drop in average occupancy of 2 percentage points to 77.4 per cent, the highest absolute value in the survey.

"Given current market conditions, it is encouraging to see that London's occupancy levels are up in the high-seventies, showing that general demand for branded hotels remains strong in the English capital," said David Bailey, deputy managing director, TRI Hospitality Consulting.

Warsaw also put in a good year-on-year performance with a 2.2 per cent rise in average room rate to €86.33 and the least reduction in profit - expressed as income before fixed charges (IBFC), which dipped by just 1.9 per cent to €30.21 per available room.

Occupancy stays low in Amsterdam and Prague

Elsewhere, average occupancy fell by 13 percentage points to 57.1 per cent in the Dutch capital. Average room rate was down by 13.2 per cent to €150.10 resulting in a fall in room revenue of nearly one third. The decrease in demand for hotel accommodation in Amsterdam was mirrored by data from the city's international airport. Schiphol handled approximately 2.7 million passengers in February, a year-on-year decrease of 13.7 per cent.

Prague reported the largest decrease in occupancy of 18.4 percentage points to 39.1 per cent. Yet despite this loss of volume there was only a minor 1.5 per cent dip in average room rate to €116.27.

Slow start of year for Vienna

In Vienna, the sample of international branded hotels reported a fall in daily profit of 81.6 per cent to just €4.28 per available room.

"On first sight such a fall looks alarming, but we must remember that the start of the year is the least important time for hoteliers in terms of generating profit. This is particularly true in the case of Vienna," said Bailey.

In 2008 the first two months of the year accounted for 5.5 per cent of annual profit in Vienna. This was higher than the previous year (2.5 per cent) due to unusually strong corporate group demand.

Looking at the single month, Paris reported a 69.1 per cent profit fall but the data was skewed by the absence of Fashion Week which occurred in February last year but March this year.

For more information contact:

David Bailey, deputy managing director 020 7486 5191
david.bailey@trihc.com

Ben Walker, research manager 020 7892 2240
ben.walker@trihc.com

Claire King, marketing manager 020 7892 2237
claire.king@trihc.com  

Services:

For an inside view of a local or regional market place in the hotel sector, bespoke HotStats reports are available. Terms and conditions apply.

To view a sample report visit: http://www.trihc.com/Home.aspx?pID=149-0 Or from the TRI home page select Market knowledge and follow the path to Market reports.