Momentum Continues for Europe's Hoteliers

Half year results show large number of cities posting double-digit growth

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. October 14, 2008

JULY 31, 2007. Latest results from the HotelBenchmark(TM) Survey by Deloitte reveal that rooms revenue per available room (revPAR) across Europe grew 6.8% for the first six months of 2007 - only slightly below the 7.2% growth achieved during the same period last year.

Despite the lack of major sporting events hosted by the region in 2006 - the Winter Olympics in Turin and the FIFA World Cup in Germany - Europe's hotels have continued to go from strength to strength. Performance has been driven by improvements in average room rates, which have increased by 5.8% so far this year.

Hotels in Valencia stole the show reporting revPAR increases of 38.2%. This growth is largely attributable to the America's Cup, which attracts sailors, spectators and media from across the world. Hoteliers managed to increase average room rates by a staggering 33.4% - whilst the Swiss managed to claim the title for the second time in a row, beating New Zealand.

Istanbul hoteliers also saw impressive revPAR growth - up 26% during the first six months of the year. The market has benefited from increased demand from a range of conferences, trade shows and sporting events. In addition Turkey has been trying to position itself more strongly as an 'arts and culture' destination. All of this activity seems to be paying off with visitor arrivals to Turkey up 16% year-to-May according to the World Tourism Organisation (UNWTO).

Lisbon has continued to perform well with revPAR up 14% so far this year. The city has hosted a number of conferences, including the biennial Alimentaria International Food Show in May, which attracted 40,000 visitors. RevPAR growth has been mainly driven by average room rates, which are currently just EUR1 off the EUR100 mark.

Another Southern Europe city that has achieved double-digit growth is Athens - with revPAR up 10.6% during the first half of 2007. May was an especially good month for the city, as it hosted the UEFA Champions League Final. On this night hotels saw revPAR soar by 116% to EUR337 - over three times higher than the year-to-date average.

London did not disappoint either, showing impressive growth of 14.6%. Business and leisure travel to the UK's capital has remained strong - and consequently London continues to achieve the highest occupancy in Europe at 80.5%.

Lorna Clarke, Executive Director of HotelBenchmark(TM) at Deloitte commented: 'Despite the absence of the same amount and scale of events hosted by Europe last year, the hotel industry has had a strong start to 2007 - with a large number of cities turning in double-digit revPAR growth. The region continues to benefit from robust economic performance - particularly across the euro area - which is helping drive both business and leisure demand for hotels. The outlook for the rest of the year looks promising however concerns remain over continuing rising credit levels and the prospect of further interest rate rises, which would place pressure on consumers discretionary spending and dampen leisure travel.'