Seven of the 10 European cities included in the latest HotStats report by TRI Hospitality Consulting registered a GOPPAR decline in January 2012.
The well-documented social and economic troubles in Greece, with mass demonstrations and riots concentrated in Athens, significantly impacted hotel trading performance. In January, RevPAR and TrevPAR declined by 15.3% and 19.7% respectively, as GOPPAR declined by 119.3% to €21.25 (US$28.26).
“The scale and impact of the riots coupled with proposed austerity measures is likely to continue to adversely impact hotel trading performance in the Greek capital for some time. From a market perspective, it is unlikely that we will see any pick-up in business or leisure-related tourism to Athens anytime soon, particularly in light of the recent news that many landmark historic buildings in Athens were vandalized and destroyed,” said Jonathan Langston, managing director, TRI Hospitality Consulting.
Barcelona and Istanbul also registered significant declines in GOPPAR performance of 36.6% and 29.6%, respectively. Interestingly, RevPAR performance in Istanbul increased by 3.7%, whilst the decline in Barcelona’s RevPAR performance was marginal at 1.6%. However, TrevPAR performance in both cities declined significantly 4.1% and 5.9% respectively.
Furthermore, GOPPAR performance also declined in Paris at 3.6%, Milan at 5.6% and Amsterdam at 1.8% despite registering positive RevPAR growth.
January is typically a challenging month when demand levels are particularly low and price-sensitive. However, eight of the 10 cities surveyed registered RevPAR growth, which from a top-level view may appear encouraging. However, it is clear that the travellers are restricting spending, which in turn results in lower TrevPAR performance. In this instance, half of the 10 cities surveyed registered a decline in TrevPAR performance.
“The market conditions for hoteliers remain challenging. Non-room revenue performance has acted as a brake on overall revenue growth and consequently overall profitability has suffered. This underlines how vital it is that the industry looks beyond rooms revenue as its pulse check,” said Langston.