Stronger European markets surpass 2008 numbers: TRI

Five of the 10 European cities for which TRI Hospitality Consulting presents data registered GOPPAR growth in December with Berlin, Prague, Warsaw and Paris experienced double digit growth.

Berlin registering the highest level of GOPPAR growth at 24.5%, while the German capital posted a 6.9% growth in occupancy performance to 68% to compensate for a 2.6% decline in average room rate performance, resulting in an 8.3% RevPAR growth to €84.40 (US$110.94).

In contrast, Frankfurt hotels experienced an 8.6% reduction in occupancy to 47.6% resulting in RevPAR and GOPPAR declines of 10% and 49.5%, respectively.

Of the top three hotel markets — London, Amsterdam and Paris — the French capital led the field with 5.2% growth in TrevPAR performance and 14.2% GOPPAR growth.

Amsterdam also experienced a rise in TrevPAR performance of 1.2%, although rising operating costs resulted in a reduction in GOPPAR of 3.9% to €39.93 (US$52.49).

London registered a slight decline in TrevPAR performance of 1.1%, resulting in a 5.8% decline in GOPPAR to €91.86 (US$120.75).

Despite a relatively weak room occupancy performance in the Hungarian capital, at just 65.5%, an increase in demand from the conference sector helped to boost the achieved average room rate for hoteliers in Budapest to €91.89 (US$120.79) from €84.77 (US$111.43) during the same period in 2010.

Prague achieved 15.5% RevPAR growth as both occupancy at 7.5% and average room rate 2.1% increased, resulting in GOPPAR growth of 15.9% to €26.13 (US$34.35). “This time last year, the Prague market experienced an influx of new hotels which, combined with turbulent market conditions, resulted in 2010 revenue and profit performance being severely impacted,” said Jonathan Langston, managing director, TRI Hospitality Consulting. “In 2011, the Czech capital has experienced 5.2% in RevPAR performance and 13.7% increase in GOPPAR performance. While the market is still performing significantly below 2008 levels, there appears to be evidence that the Prague hotel market has bottomed out and is beginning the process of recovery.”

In 2011, London, Paris and Amsterdam registered GOPPAR performance surpassing previous peak 2008 performance levels according to the latest Hot-Stats survey. Eight of the 10 cities surveyed experienced an increase in 2011 GOPPAR performance when compared to 2010, the exceptions being Madrid at 2.6% and Rome at 11.3%.

For 2011, the hotel markets of Amsterdam, Warsaw, Prague and Paris all experienced double-digit growth in GOPPAR performance, with Paris registering the greatest growth in RevPAR of 12.1%, TrevPAR of 9.2% and GOPPAR of 15.8%.

“Overall, the fact that revenue and profit performance for most of Europe’s major cities has grown in 2011 is positive when considering what has happened to the European economy since 2009,” Langston said. “For the majority of these markets, the primary factor for an uplift in RevPAR performance in 2011 has been the relative increase in the volume and value of corporate travel.”

Of the 10 cities surveyed in December, 2011 GOPPAR performance of Amsterdam, London, Paris, Frankfurt, Berlin and Warsaw surpassed previous peak 2008 GOPPAR performance.

“In 2011 major cities in European nation economies which have shown greater resilience since the economic downturn in 2008 such as UK, France, Germany and Poland achieved revenue and profit performance exceeding pre-recession performance,” Langston added. “In 2012 it will be interesting to see how continental and global market conditions will affect various European hotel city markets. Many will monitor whether more established and mature markets such as Paris, Amsterdam and London will be able to continue to achieve sustained revenue and profit growth while on the other end of the scale, observe whether other major European city markets which have begun the process of revenue and profit recovery can continue the trend.”