? With a rise in RevPAR that was up by 1.7% in July, the pickup in the hotel industry in Europe has not been halted even though the rise was less spectacular than that of the month of June (+5.6% in RevPAR).

? Occupancy rates are quite stable (+0.5 points) and the average room rates are also near to those of last year (+1.0%).

? Since the beginning of the year, the trend has been towards improvement. Total RevPAR from January to July increased by 3.9% at the level of the 25-country European Union over last year.A moderate rise in RevPAR in July 2004

In July, the occupancy rates of the European hotel industry were virtually unchanged over last year (+0.5 points). This figure remains positive, even though it is down versus those of May and June (+1.7 points and 2.5 points respectively).

All categories had a difficult time with occupancy in July. This is the case in the hard-budget categories, which experienced hardship in incorporating the expansion of the supply in recent years. Even though the average occupancy of these properties remains at a very satisfactory level, at 80.6% in 0* and 77.0% in 1*, the change from one year to the next was slightly negative (-1.5 points and -1.1 points respectively). The upmarket hotel industry saw a globally acceptable month of July, with occupancy rates identical to those of last year. Only the 2* and 3* categories saw their occupancy increase this year from 0.4 points in 2* to 1.4 points in 3*.

Hotels in the 2* category saw the largest increase in RevPAR (+4.3%), thanks to a significant increase in average daily rates. The hard-budget categories also posted a rather strong increase in RevPAR, sustained by enough growth in average daily rates to compensate for the drop in occupancy. The upmarket hotel industry once again saw an improvement in RevPAR in July, also thanks to action in the average daily rates. However, the manoeuvring room is limited for the 4* hotels. Rises in the average daily rates by 1.2% and RevPAR by 1.3% did not compensate for the drops recorded in July 2003, which saw hotels’ average daily rate in this segment fall by 5.0%, leading to a slide of 5.8% in RevPAR versus July 2002.

According to the general opinion, the return of non-European customers, notably North American, was not as great as hoped. Many observers have noticed that the budgets of these consumers is down versus previous years, due to the high value of the European currency versus the dollar, since the former has reached record levels in recent months.

Within this context, 3* hotels post an increase in RevPAR just as moderate, due to a greater competition from more upmarket hotels.

The trend since the beginning of the year has been leaning towards an improvement.

The total results since the month of January temper this mitigated result. By the end of July, the trend remained largely on the rise. The average RevPAR of the European hotel industry rose by 3.9%. This improvement in indicators resulted from a simultaneous rise in occupancy rates and average daily rates (+1.5 points and +1.5 points respectively) versus the same period in 2003.

In terms of RevPAR, all segments benefited from an increase in their results. We nevertheless notice the difficulties encountered by the 3* hotel category in maintaining their average daily rates, down by 1.2%.

Traditional tourist destinations are facing competition

Results by country show great heterogeneity. The traditional tourist destinations that are France, Spain, and Italy have recorded a somewhat mitigated month of July. RevPAR is on the decline in those countries by 1.1%, 8.5%, and 1.4% respectively. They are the only countries in the European Union to post drops in occupancy in July.

There are various reasons for this. Spain saw its supply increase significantly in recent years. In France, the weather has not been very favourable, while some holidaymakers on the other hand feared another heat wave such as the one that the country saw last year. Finally, the source markets, both American and European, and notably Germany, did not provide the number of customers anticipated.

The emergence of new destinations (Croatia, Maghreb) that are coming into competition with the major tourism countries is now a fact. The United Kingdom, the Nordic countries, as well as Eastern European countries have all done well with highly significant rises in RevPAR, thanks to sustained increases in occupancy rates.

The totals since the beginning of the year have confirmed the excellent position of the hotel sector in the United Kingdom (increase in occupancy rate of 3.2 points and a rise in average daily rates of 7.2%) and the return of a more sustained demand in Germany, where the efforts made in terms of average room rates have not stalled the rise in RevPAR, on the rise by 4.2%. On the other hand, hotel indicators remain strongly down over last year in Spain, where the drops in average daily rates has not allowed maintaining occupancy levels. The results recorded since the beginning of the year in France places the country slightly below the European average: improvement in occupancy rates, accompanied by moderate growth in average daily rates (+0.5 points and +2.2% respectively).

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