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Coast and country: tracking recovery throughout Europe

As countries across Europe begin to surface from lockdown, new trends in hotel performance have emerged as a result of the COVID-19 pandemic. Recent data suggests a distinct preference for regional destinations or, “coast and country,” as STR Director of Account Management Aoife Roche explained in a recent webinar.

Beach bums

Coastal occupancy was on average 35 percentage points higher than main city occupancy across six European countries for the week ending 25 July 2020. Even Italy, once the epicenter of COVID-19 in Europe, reported 53% occupancy in the Basilicata/Calabria/Puglia market.

Coastal Markets Outperform Cities

There are a few possible explanations for coastal markets’ strong performance in relation to big cities. Segmentation remains a key consideration: Leisure travelers are a primary demand driver at this point in the pandemic, and beaches are traditionally popular holiday destinations.

Beyond segmentation mix, new COVID-related hygiene guidelines are also influential. Physical distancing requirements may shift demand from crowded urban areas into sprawling, bucolic destinations. Markets centered around lower-risk outdoor activities – aka beaches – may have better luck attracting travelers looking to vacation safely.

High-class holiday

Moving away from coasts and into the countryside yields another pandemic performance pattern, this one related to hotel class. Luxury and upper upscale class hotels have struggled mightily over the past several months, largely due to their reliance on group and business demand. As these sources dried up, performance suffered and many hotels temporarily closed.

However, travelers moving out of cities and into secondary and tertiary markets have breathed new life into higher-end hotels. Luxury and upper upscale class properties in provincial markets across nine countries filled more than 50% of rooms for the week ending 25 July. Such high demand is impressive on its own, but next to comparable hotel performance in city centers, a clear preference for regional destinations appears. Main city occupancy in five of nine countries fell short of 20% during the fourth week in July.

Higher-end hotels shine in provincial areas

Across provincial markets, luxury and upper upscale occupancy exceeded average market occupancy in six of nine countries, suggesting a preference for upper-tier hotels over mid-tier or budget properties.

Pricing power, pandemic-style

Healthy demand for luxury and upper upscale hotels allowed for pricing power, and provincial markets in five of nine countries increased average daily rate year over year, a welcome shock in the middle of the worst hotel downturn in history. Among main cities, Vienna, Austria, fared the best, breaking even with flat percentage comparison from the same week in 2019.

The impact of limited supply adding pressure to ADR cannot be discounted, but Ireland Provincial was the only provincial market with more than 10% of luxury and upper upscale hotel supply closed. Market supply rose year over year in Belgium Provincial and Russia Provincial despite the pandemic.

Luxury & upper upscale rates strongest outside of cities

Segmentation shift could be the reason for provincial markets’ noticeable ADR growth. Exchanging pre-negotiated group rates for higher transient rates with their shorter booking window could increase ADR in hotels heavily reliant on group demand. However, this phenomenon is more likely to occur in primary markets, not secondary and tertiary provincial markets.  


From the coast and into the countryside, regional markets are proving the most resilient as we enter the very early stages of COVID-19 recovery.

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