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COVID-19 webinar summary: 5 key points on Europe, 16 April

In 16 April’s webinar session, Robin Rossmann provided an update on Europe hotel performance and analysis of what’s to come through business-on-the-books data and our March forecast. We’ve summarized five key points below.

Europe RevPAR declines seem to have reached the bottom

While a number of markets were resilient to COVID-19 in February, March brought declines in revenue per available room (RevPAR) across all key markets. As the below rolling 28-day RevPAR data shows, the year-over-year decrease had reached 89.4% by April 12—far worse than the 28%

Europe hotel RevPAR has seemingly reached the bottom

Business on the books visible from May onwards

As the image below shows, business on the books is evident around the summer months. However, it is important to note that pickup in forward demand is negative through to August, and many cancellations are still coming through, as of 6 April 2020.

COVID-19 impact on Europe hotel forward demand

Edinburgh as a forward demand case study

Looking at a Forward STAR market in more detail, Edinburgh highlights the trend of occupancy holding out from around 3 months in the future and onwards. From July onwards, forward demand as of 6 April is comparable to the levels of 4 March. Again, there is the issue of pickup declines in the short term.

Edinburgh hotel business on the books, April vs. March

Potential demand return and recovery speed

As Robin Rossmann discussed in our previous Europe update, the lessons learned from previous downturns and China’s COVID-19 recovery indicate that leisure demand is likely to return first, potentially driven by domestic tourism. This would likely be followed by corporate transient, although the extent would depend on the economic rebound and landscape. Lastly, corporate group travel would return—although this will be affected by the post-COVID-19 event calendar.

Factors that could influence hospitality recovery following COVID-19

Forecast for 2020 and beyond

The United Nations World Tourism Organization (UNWTO) is forecasting that international tourist arrivals could decline by 20-30% in 2020, which is notably similar to our March forecast for Europe, as seen below. A full summary of our Europe forecast-focussed webinar in partnership with Tourism Economics can be found here

Europe hotel forecast March 2020

The full recording of this webinar can be found here and further insights into COVD-19's impact on hotel performance here.