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Europe Market Update Q3 2015

Europe Market Update Q3 2015 from STR Global

Spotlight Europe – Constant Currency

Market performance – RevPAR, September 2015 YTD, EUR, Constant Currency

A focus on Europe’s performance 

Hotels in Europe reported a +7.6% increase to EUR 80.2 in revenue per available room (RevPAR) levels for September 2015 year-to-date (EUR Constant Currency*). This was the result of positive Occupancy (+2.8%) and average daily rate (ADR) (+4.7%), when compared to the same period in 2014. 

September 2015 YTD Occupancy, ADR & RevPAR percentage change in EUR

*FX = Foreign Exchange Rate, **CC = Constant Currency

When eliminating the exchange rate impact towards the euro, and calculating ADR on a constant currency basis, all European sub regions indicated a positive RevPAR growth for the first half of 2015. 

Despite the weakened euro partly impacting overall ADR increases in Europe, all subcontinents managed to increase Occupancy levels compared to the same time period in 2014. The increase in Occupancy can be seen as a positive result of inbound travel into Europe, due to a benefiting currency conversion rate which particularly affected Southern and Eastern Europe. 

*Constant Currency is an exchange rate that eliminates the effect of exchange rate fluctuations.

Europe Performance – 12 Month Moving Average

ADR and Occ, Jan 2013 – Sep 2015, EUR, Constant Currency


Europe Class Comparison 

September 2015 YTD, Occ, ADR and RevPAR, EUR, Constant Currency


Occupancy and ADR increased throughout all class segments for the first nine months of the year. However, the positive performance was mainly driven by the increases in ADR, which grew at a slightly faster pace than occupancy. 

The Midscale & Economy hotel segment continued to maintain the highest increase of all classes in both measures, with a +5.8% growth in ADR and a +2.9% increase in occupancy. The ADR growth is followed by Luxury (+5.7%) and Upper Midscale (+4.9%).

2015 Q2 Snapshot: Europe Countries

Occ, ADR % Chg., September 2015 YTD, in Local Currency

  • Ireland posted a +3.6% increase in occupancy to 89.7% as well as double-digit growth in ADR (+17.7% to EUR119.78) and RevPAR (+21.9% to EUR107.47) for the third quarter of 2015. In September, Ireland was one of the strongest performing European countries in absolute occupancy and ADR. Demand has grown year to date by 5.3%, and occupancy in the country has eclipsed 80.0% in five consecutive months. Thanks to strong demand, ADR in Ireland has increased 15.3% year to date. 
  • Italy reported a +10.1% rise in occupancy to 75.5% and double-digit increases in ADR (+11.3% to EUR164.37) and RevPAR (+22.6% to EUR124.11) for Q3. Significant performance increases occurred in Milan, which hosted Fashion Week (23-29 September) and Expo Milano (1 May to 31 October). Absolute occupancy in the market reached 89.0%, and RevPAR increased year-over-year by 43.6% in the month of September. 
  • Russia, experienced double-digit growth in September in occupancy (+16.5% to 69.7%) and RevPAR (+27.9% to RUB3,574.12). ADR in the country was up 9.8% to RUB5,128.55. Domestic travel has served as a main driver of growth within the country. In addition, Sochi, a holiday destination, reported increases of 25.0% in occupancy and 40.9% in ADR in September YTD. 
  • The United Kingdom saw nearly flat occupancy (+0.3% to 85.3%) and increases in ADR (+5.5% to GBP96.46) and RevPAR (+5.8% to GBP82.27) in September. England was hosting the Rugby World Cup (18 September to 31 October), and hotels in Cardiff, Twickenham, Newcastle and Leeds have seen the most significant RevPAR gains.
  • Bratislava, Slovakia, posted double-digit increases in occupancy (+19.3% to 70.3%) and RevPAR (+23.7% to EUR40.64) in the third quarter of 2015. ADR in the market was up +3.8% to EUR57.85. The absolute occupancy level (76.3%) was the highest for any month in Bratislava since September 2007. According to Oxford Economics, Slovakia’s economic growth is expected to outperform the Eurozone. 
  • Bucharest, Romania, reported increases across the three key performance metrics in September: occupancy (+2.7% to 79.8%), ADR (+7.4% to RON353.22) and RevPAR (+10.3% to RON281.70). RevPAR has grown year-over-year in Bucharest for 17 consecutive months
  • Dublin, Ireland, saw a 2.3% increase in occupancy to 92.2% as well as double-digit growth in ADR (+17.5% to EUR122.91) and RevPAR (+20.2% to EUR113.31) for the month of September. Dublin ranked second amongst key European markets in absolute occupancy. While supply has remained fairly flat in the market, demand is up year-to-date by 5.9%. 
  • Moscow, Russia, experienced a strong month September with double-digit increases in occupancy (+12.2% to 75.5%) and RevPAR (+16.1% to RUB4,414.00). ADR in the market was up 3.5% to RUB5,844.21. Moscow hosted two international conferences during the month: COMTRANS International Exhibition for Commercial Vehicles (8-12 September) and Textillegprom Federal Trade Fair (22-25 September). Occupancy YTD for Moscow increased only by +0.9%, however, the third quarter increased strongly with +10.2%. 

All ADR and RevPAR figures measured in local currencies.

Top 5 Countries Europe

In Construction Pipeline, September 2015 Report