Hotels in the DACH (Germany, Austria and Switzerland) region saw a considerable increase in quarterly and growth in annual revenue, with the fourth quarter painting a rosy picture for the market’s hotel sector, a recent study has said.
The region’s hotel sector outperformed the service apartment in Q4 2023, with the hotel sector’s revenue up 13.7% YOY compared to just a 0.3% rise for serviced apartments, according to a study by hospitality property management platform Apaleo.
Hotels in Germany, Austria and Switzerland saw rapid growth from October to December, bucking inflationary pressures and capping off an impressive year, the study added.
The study was based on an analysis of 3.7 million bookable nights on Apaleo’s property management platform between October to December 2023 compared to October to December 2022.
While occupancy rates jumped 5.3%, the significant boost came from a 4.3% rise in ADR to €95.11 ($104.33), signaling healthy demand for conventional hotel stays. RevPAR stood at €62.9 ($69) in the fourth quarter. This resulted in revenue growth climbing 9.9% over the full year, while occupancy and ADR improved by 4% and 5%, respectively, in 2023.
Due to a seasonal slowdown, however, the quarter-on-quarter performance slipped, with hotels posting a 16.1% decline in RevPAR between Q3 and Q4 2023. ADR and occupancy fell 7.3% and 12.2%, respectively.
Data suggests that there has been a healthy appetite for hotel stays in the last quarter of 2023, with travelers driving demand for more conventional stays, Martin Reichenbach, Apaleo CEO, said.
“However, both accommodation categories experienced impressive growth over the year, and there’s good reason to be optimistic about what 2024 will hold,” Reichenbach said. “A strong DACH business travel rebound is likely fuelling hotel growth, particularly in major cities, with the sector able to capitalize on the travel industry’s final return to ‘normal’ last year. Despite ongoing inflationary pressures and cost of living issues, travel demand has proved surprisingly resilient, and we suspect we’ll continue to see this demand rise this year if these headwinds continue to ease.”
SERVICED APARTMENTS PERFORMANCE
Hotels in DACH outperformed the serviced apartments sector in the fourth quarter as well as throughout the year, Apaleo said, based on a study of 3.7 million bookable nights.
The serviced apartments sector’s performance wasn’t a washout entirely. Annual RevPAR in 2023 stood at 7.6%, with Q4 occupancy declining by 5.4%, which helped offset a 3.9% rise in ADR to €97.91 ($107.4). RevPAR increased only 0.3% quarter-to-quarter to settle at €75 ($82.27) in the fourth quarter.
Through the year, serviced apartments ADR witnessed greater improvements than hotels, surging 11.1% YOY. This was hampered by a decline in occupancy (-3.9%).
Serviced apartments also saw quarter-on-quarter seasonal declines. RevPAR fell by 13.6%, while ADR and occupancy were down 7.8% and 6.7%, respectively.
Apaleo currently operates 1,000 hotels and serviced apartments, accounting for 50,000 rooms across 24 countries.