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STR: AsiaPac, MEA, Europe, S.America October Hotel Performance

STR: AsiaPac, MEA, Europe, S.America October Hotel Performance

Asia Pacific

Hotels in the Asia Pacific region reported positive results in the three key performance metrics during October 2017, according to data from STR.

U.S. dollar constant currency, October 2017 vs. October 2016
Asia Pacific
  • Occupancy: +0.7% to 71.7%
  • Average daily rate (ADR): +2.3% to US$104.15
  • Revenue per available room (RevPAR): +2.9% to US$74.68
Local currency, October 2017 vs. October 2016
Hong Kong
  • Occupancy: +1.3% to 91.8%
  • ADR: +2.6% to HKD1,395.12
  • RevPAR: +3.9% to HKD1,281.33

Despite notable supply growth (+3.1%), occupancy rose due to a 4.5% year-over-year increase in demand. STR analysts partially attribute that demand growth to inbound arrivals, especially from Mainland China. Through the first nine months of 2017, Hong Kong welcomed 20.2 million overnight visitors (+4.3% year over year). Visitors from Mainland China accounted for 67% of the total (+5.3% year over year). Additionally, the National Day Golden Week (1-7 Oct. every year) and the Mid-Autumn Festival holiday combined into an eight-day holiday period in 2017. Hong Kong recorded 5.1% demand growth during the event year over year, resulting in a 13.9% rise in RevPAR during the period.

Indonesia
  • Occupancy: +1.9% to 64.4%
  • ADR: -1.3% to IDR980,023.75
  • RevPAR: +0.6% to IDR630,662.71

RevPAR grew slightly after three consecutive years of October declines. The positive performance was largely driven by key business markets such as Jakarta and Surabaya, where hotel demand increased 10.0% and 14.4%, respectively. That growth represented a reversal in the year-to-date trend of demand declines. Bali suffered a demand decline (-6.2%) in October 2017 due to the ongoing threat around Mount Agung, which has hindered MICE (Meetings, incentives, conferencing, exhibitions) business.

Philippines
  • Occupancy: +3.1% to 67.4%
  • ADR: +4.4% to PHP5,281.52
  • RevPAR: +7.6% to PHP3,561.08

Hotel demand grew 6.9%, surpassing significant supply growth (+3.7% year over year).STR analysts note that the Philippines’ tourism market is expected to remain resilient in spite of the Malawi incidents this year. Inbound tourist arrivals increased 11.9% to 4.4 million visitors as of August, according to the Pacific Asia Travel Association. Strong demand from corporate travelers is also indicated by transient demand growth.

Middle East & Africa

Hotels in the Middle East reported mixed performance results during October 2017, while hotels in Africa posted growth across the three key performance indicators.

U.S. dollar constant currency, October 2017 vs. October 2016
Middle East
  • Occupancy: +3.3% to 64.9%
  • Average daily rate (ADR): -4.0% to US$163.27
  • Revenue per available room (RevPAR): -0.8% to US$106.04
Africa
  • Occupancy: +7.6% to 62.5%
  • Average daily rate (ADR): +8.4% to US$105.89
  • Revenue per available room (RevPAR): +16.7% to US$66.14
Local currency, October 2017 vs. October 2016
Bahrain
  • Occupancy: +9.2% to 49.2%
  • ADR: -8.2% to BHD58.71
  • RevPAR: +0.2% to BHD28.86

STR analysts note that the year-over-year increase in occupancy came in comparison with a low base from October 2016. The country’s absolute occupancy level was helped by a pair of events in Manama: the Federation of Afro-Asian Insurers and Reinsurers 25th Conference (9-11 October) and the Bahrain International Defence Exhibition and Conference (16-18 October). The absolute ADR level was the lowest for an October in Bahrain since 2006.

Egypt
  • Occupancy: +32.0% to 57.0%
  • ADR: +73.6% to EGP1,151.26
  • RevPAR: +129.3% to EGP656.07

The devaluation of the Egyptian pound led to the highest October ADR value on record for the country. Occupancy growth was inflated by a comparison with Egypt’s second-worst October occupancy month on record (43.2% in 2016). The country continues to recover from security concerns, and demand (roomnights sold) has grown by double digits in nine of 10 months in 2017.

Kenya
  • Occupancy: -26.4% to 40.7%
  • ADR: -10.7% to KES11,937.82
  • RevPAR: -34.2% to KES4,861.17

The absolute occupancy level was the lowest for any October on record, while ADR fell in line with recent trends. According to STR analysts, political struggles in the country have taken their toll on hotel demand (roomnights sold), and the steepest daily RevPAR declines occurred on the days around the election (26 October).

Europe

Europe’s hotel industry reported positive results in the three key performance metrics during October 2017.

Euro constant currency, October 2017 vs. October 2016
Europe
  • Occupancy: +1.7% to 76.0%
  • Average daily rate (ADR): +4.0% to EUR112.75
  • Revenue per available room (RevPAR): +5.8% to EUR85.68
Local currency, October 2017 vs. October 2016
Czech Republic
  • Occupancy: +3.6% to 84.3%
  • ADR: +4.1% to CZK2,334.36
  • RevPAR: +7.8% to CZK1,968.95

The absolute occupancy level was the highest for any October on record in the country. Levels were lifted by performance in Prague, which also set an October occupancy record (89.9%). The market hosted the World Sleep Congress from 7-11 October, and occupancy was above 90% on both 9 and 10 October.

Netherlands
  • Occupancy: +1.6% to 78.5%
  • ADR: +5.9% to EUR124.60
  • RevPAR: +7.6% to EUR97.80

STR analysts note that the country has shown consistent occupancy growth throughout 2017. At the market level, Amsterdam (EUR134.17), Utrecht (EUR85.81) and The Hague(EUR83.26) recorded the highest actual RevPAR levels.

Turkey
  • Occupancy: +22.9% to 64.2%
  • ADR: +15.9% to TRY272.08
  • RevPAR: +42.5% to TRY174.55

The country continues to recover from the 2016 coup d’état attempt, which contributed to a 52.2% October occupancy level last year. That level was the lowest for an October in Turkey since 2001. This October was the fourth consecutive month with double-digit occupancy growth in the country.

Central & South America

Hotels in the Central/South America region reported positive year-over-year results in the three key performance metrics during October 2017.

U.S. dollar constant currency, October 2017 vs. October 2016
Central/South America
  • Occupancy: +7.3% to 60.6%
  • Average daily rate (ADR): +13.0% to US$108.91
  • Revenue per available room (RevPAR): +21.3% to US$66.01
Local currency, October 2017 vs. October 2016
Argentina
  • Occupancy: +10.0% to 69.7%
  • ADR: +22.4% to ARS2,113.25
  • RevPAR: +34.6% to ARS1,473.21

Nearly flat hotel supply coupled with a significant increase in demand drove occupancy for the month, while the spike in ADR came as a result of inflation. STR analysts point out that if demand continues at the same level, Argentina will achieve total-year occupancy above 60% for the first time since 2011.

Brazil
  • Occupancy: +10.4% to 57.9%
  • ADR: +2.5% to BRL281.23
  • RevPAR: +13.1% to BRL162.84

Brazil experienced its first positive year-over-year RevPAR development since August 2016, the month of the Summer Olympics in Rio de Janeiro. STR analysts note that hotel supply growth has started to slow since July 2017, especially compared with significant growth rates of the last three years. Overall in the past few months, Brazil has shown early signs of performance recovery, with the exception of Rio, which has experienced a -47.0% drop in RevPAR year to date.

Ecuador
  • Occupancy: -8.8% to 63.1%
  • ADR: -18.8% to US$98.46
  • RevPAR: -25.9% to US$62.14

Ecuador had experienced year-over-year growth in occupancy each month since January, but falling demand led to an occupancy decline in October. Rates, however, fell more significantly (-18.8%), mainly as a result of a high comparison base in October 2016. That month, the country hosted Habitat III, a United Nations Conference on Housing and Sustainable Urban Development, from 17-20 October.

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