Full year results from the HotelBenchmark™ Survey by Deloitte reveal that revenue per available room (revPAR) across Europe grew 4.5% in 2005 – with all but four European markets reporting an improvement compared to 2004. Although Europe experienced the lowest revPAR growth compared to other regions of the world, absolute revPAR was the highest at €69, primarily due to the strength of the Euro particularly to the US dollar.

The best performing region was the East Mediterranean, where revPAR grew a staggering 29.4% fuelled by the substantial increase in visitor numbers to Israel and Turkey. The Israeli Ministry of Tourism estimate that nearly 2m people visited the country during 2005, a 28% increase on 2004, whilst in Turkey tourist arrivals increased by 20%. Turkey’s capital, Istanbul hosted the Formula 1 Racing Championship for the first time in August 2005, which attracted a large amount of visitors.

Hotels in Central and Eastern Europe can also be proud of their performance, as revPAR increased 12.5%. This growth was stimulated by Moscow’s exceptional performance where revPAR increased 30.4%. With the continued lack of internationally branded hotels and increasing demand, there seems to be no end in sight in the growth of average room rates in the city. In Warsaw revPAR grew an impressive 15% driven primarily by increasing demand. An increase in the number of low-cost airlines servicing the city continues to bring in more tourists and consequently the supply demand imbalance that has existed for the last few years is finally being redressed.

It was in Northern Europe that hotels reported the highest absolute revPAR. Even though growth was subdued at 3.8%, steady economic activity in the UK and the Nordic countries allowed the region to achieve absolute revPAR of € 76. Copenhagen was Northern Europe’s top performing market with a revPAR increase of 20.4%. The city has benefited from increased business demand and from the rise in the number of low-cost airlines servicing Copenhagen airport. Although the July 7 terrorist attacks hampered London hotel performance the effect was relatively short lived during the month of August when occupancy levels plummeted to their lowest ever. However, hoteliers managed to retain average room rates resulting in revPAR growth of 1.6% for the year.

Hotels in Western Europe experienced revPAR growth of 3.9%. The sluggish performance of two key economies - Germany and France – was one of the factors holding back hotel performance in the region. Berlin was one of the four European markets which reported a revPAR decline in 2005, as the city continued to suffer from oversupply. Luxembourg benefited from hosting the EU presidency during the first half of the year with revPAR increasing 13.1%.

Southern Europe was the weakest performing region during 2005 with no revPAR growth. Its performance was dragged down by the significant revPAR declines in both Lisbon and Athens. Both cities hosted major sporting events in 2004 and naturally could not sustain this performance during 2005. A number of Spanish cities are suffering from over-supply and as a result the country only reported very modest revPAR growth of 1.3%.

Julia Felton, Executive Director of HotelBenchmark™ commented: “Prospects for 2006 for the hotel industry across Europe look sound. As Gross Domestic Product expectations remain modest, revPAR growth will be steady rather than substantial. East Mediterranean and Central and Eastern Europe are likely to continue achieving higher growth than other European regions, with business demand as well as tourist arrivals growing. However, hotel performance in Italy and Germany is expected to improve as they benefit from hosting major sporting events – the Winter Olympics and the Football World Cup.”

Europe’s winners and losers in 2005

Occupancy(%) Average Room Rate (€) RevPAR (€)
2005 2004 % Change 2005 2004 % Change 2005 2004 % Change
Jerusalem
64.3
50.2
28.0
104
90
15.7
67
45
48.1
Tel Aviv
68.3
54.1
26.1
117
102
14.1
80
55
43.8
Istanbul
74.4
65.1
14.3
117
94
24.6
87
61
42.4
Moscow
72.4
74.6
-3.0
188
139
34.4
136
104
30.4
Berlin
64.4
64.2
0.4
83
85
-2.0
54
55
-1.7
Barcelona
69.5
69.9
-0.7
121
124
-2.5
84
86
-3.1
Athens
62.7
61.6
1.7
134
169
-20.8
84
104
-19.4
Lisbon
56.4
60.1
-6.2
94
110
-14.5
53
66
-19.8

Source: HotelBenchmark™ Survey by Deloitte

Note: All analysis in Euros

The HotelBenchmark™ Survey contains the largest independent source of hotel performance data outside of North America and tracks the performance of over 6,500 hotels and 1.2 million rooms every month. Monthly surveys are produced on the following areas:

  • Four regional rate and occupancy surveys covering Asia-Pacific, Europe, Central & South America and the Middle East & Africa.
  • Twelve country/sub region rate and occupancy surveys for Australia, Benelux, China, Germany, India, Italy, New Zealand, Nordic Countries, Qatar, Southern Africa, Spain and UK.
  • Two city rate and occupancy surveys for London and Paris.
  • Monthly profitability surveys on Germany and London.
  • On an annual basis we produce profitability surveys tracking performance across all regions of the world.
  • Daily HotelBenchmark™ tracks rate and occupancy everyday for a number markets across the UK, Europe and the Middle East. Coverage is building rapidly since launch in early 2005.

About Deloitte | In this press release references to Deloitte are references to Deloitte & Touche LLP. Deloitte & Touche LLP is based in 21 UK locations, with over 9,500 staff nationwide and fee income of £1,355 million in 2004/2005. It is a member firm of Deloitte Touche Tohmatsu, a leading professional services organisation, delivering world-class audit, tax, consulting and corporate finance services, with around 120,000 people in over 140 countries. Deloitte Touche Tohmatsu is a Swiss Verein, and each of its national practices is a separate and independent legal entity.

Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press.

For further information, visit our website at .

Tina Wanstall
+44 (0) 20 7007 0981
STR Global