21 of the 25 key cities surveyed report double-digit growth in rooms yield
November 8, 2000- The Arthur Andersen Hotel Industry Benchmark Survey shows that for the year-to-September,
buoyant trading conditions prevailed across the whole of Europe.
Hotels across Europe reported occupancy of 70 percent, a rise of three percent over the same period last year.
Average room rates rose 12 percent to reach Euro 115, resulting in an overall improvement in rooms yield of 15 percent.
A significant reason for this impressive performance has been the relative strength of the dollar to the Euro, making travel for the US market more affordable. This is illustrated by the fact that European rooms yield performance when measured in US dollars has remained static.
Overall there were positive improvements in performance however marked differences in the performance of various markets was visible, depending on their stage in the business cycle. The UK market mirrored the rooms yield growth across the whole of Europe, demonstrating growth of 14 percent. However, as occupancy levels remained static at 73 percent, growth was entirely driven by increases in average room rate.
The German market marginally under-performed the European average, reporting a 13 percent rise in rooms yield, the resultant combination of a five percent increase in occupancy and an eight percent improvement in average room rate. This reinforced the recovery that begun in the sector during 1998.
Of the markets tracked, only two – Cardiff and Stuttgart – experienced a decline in rooms yield, (when measured in Euros), in the period, when compared to 1999. One reason being both of these markets experienced above average performance during 1999 - in Cardiff, the opening of the Welsh parliament helped improve performance, whilst in Stuttgart the biennial “fair” year boosted performance upwards.
21 of the 25 primary cities surveyed reported double digit growth in rooms yield compared to the same period in 1999. This compares to 10 cities which reported double digit yield growth for the same period in 1999 and nine cities in 1998, making this the third consecutive year of positive growth across major European markets. The top five cities in terms of rooms yield growth, (when measured in Euros), for the first nine months of the year were:
Top five performing cities in terms of rooms yield growth – year-to September 2000
|
City |
Occupancy % |
Change % |
Room Rate |
Change % |
Rooms Yield (RevPAR) |
% Change |
| Hannover |
65 |
19 |
132 |
60 |
85 |
91 |
| Istanbul |
66 |
21 |
140 |
21 |
93 |
46 |
| Prague |
75 |
12 |
105 |
24 |
78 |
39 |
| Amsterdam |
87 |
4 |
152 |
22 |
132 |
28 |
| Gatwick |
87 |
5 |
116 |
16 |
101 |
22 |
The performance of the Hannover market has been impacted by EXPO 2000, as average room rates have risen 60 percent to reach Euro 132, compared to Euro 82 for the same period last year. Hotels in the Benelux region benefited from strong demand associated with Euro 2000 and a number of significant conferences. In Prague hotels have experienced improved performance partly attributable to the fact that the city is one of the European cities of culture and was host to the 55th IMF and World Bank conference.
Amsterdam maintained its position as the top performing market within Europe recording an occupancy level for the first nine months of the year of 86.9 percent, narrowly squeezing out hotels at Gatwick airport which managed a very credible 86.8 percent. With the central Amsterdam market near capacity, hotels adjacent to Schipol airport benefited as conference organisers found it difficult to secure rooms in the city centre. As a result hotels at Schipol have seen occupancy move upward by seven percent to reach 83.4 percent. Hotels in Zurich reported an occupancy of 83.2 percent, displacing London to take the fourth spot with all London hotels trailing fifth having reported an average occupancy of 81.8 percent.
© 2000 Arthur Andersen
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