Analysis by Christina Choueifaty and Kelsey Fenerty
The Southern European hospitality market experienced yet another year of high performance. In 2024, regional RevPAR increased 9.8% year over year as the allure of beaches and historic cities attracted leisure travelers from around the globe. This robust demand lifted average daily rate (ADR) 8% to EUR175 – the highest regional rate in Europe for the year.
The 2024 Paris Olympics injected a significant surge of demand into the French hospitality market. Paris, naturally, witnessed the most pronounced impact, with hotels maintaining 80%+ occupancy during the two-week Games period, and peaking at 90.5% midway through.
ADR was the real winner, however, averaging EUR781 during the event. All Parisian submarkets benefited from heightened demand, though RevPAR was strongest in areas close to Olympic venues and key tourist attractions: Champs Elysees, Louvre/Marais, and Opera/Grands Boulevards. The Games didn’t just benefit Paris, however. French hotel RevPAR outside Paris increased 12.4% in July and 17.2% in August, as the Olympics spotlighted French destinations and culture beyond the capital.
Spain also witnessed another remarkable year of double-digit growth, as a surge in international tourism helped propel RevPAR 11.5% ahead of 2023. Key cities such as Madrid and Barcelona, renowned for their cultural richness and vibrant nightlife, led the country, with RevPAR up 7.7% (Barcelona) and 14.0% (Madrid). Coastal destinations like the Balearic and Canary Islands also witnessed a more controversial boom in tourism. The Balearic Islands ended 2024 with 68.4% occupancy, just ahead of the pre-pandemic level, and 10.7% RevPAR growth compared to 2023. While Canary Islands’ occupancy did not quite surpass the 2019 level, rates more than impressed, growing 10.2% year over year and exceeding pre-pandemic levels by more than 37%.
Spain is not the only Southern European market struggling to incorporate such significant influx of tourism. Overtourism has emerged as a critical threat across the region, impacting popular destinations and local communities. The strain on local resources led to a variety of responses in 2024, from resident-led protests in Spain to more official government involvement like tourism taxes and visitor caps in Italy.
Despite both unorthodox and more official approaches to addressing overtourism, both occupancy and ADR in Athens, Rome, Venice, and the Spanish islands continued to climb in 2024. Forward-looking data further suggests that overtourism measures have yet to deter most travelers, as occupancy on the books continues to rise year over year for many Southern European markets even in the slower off-season.
Paris eagerly awaits a year of normalization post-Olympics (2024) and Rugby World Cup (2023). Italian markets will look to continue attracting long-haul travelers via more direct flights to the U.S. and Asia Pacific regions. For the Spanish markets, balancing local needs and traveler demand will be top of mind.