2010 RevPAR development

Western Europe led the upturn – particularly Germany, France, Benelux and the UK. All key destinations in this region have experienced strong or even exceptional RevPAR growth. In most cases the growth has followed the economic recovery of each of these countries, but has sometimes also been helped by other factors. In Germany, for instance, the reduction in the VAT rate helped to boost occupancy and rate. An equivalent factor does not exist in 2011 and it is therefore reasonable to expect a somewhat slower development in Germany during this year. The UK had a strong performance in 2010, driven by double-digit RevPAR growth in London, which was heavily supported by international tourism due largely to the strong euro and weak pound. Regional UK fared less well, as these regions have a much higher share of domestic customers. The effects of government spending cuts and the increase in the VAT rate in the UK remain hard to predict at this time.In the Nordics, Sweden was the only country that marked a solid improvement during the year, supported by the country’s strong economic recovery. Stockholm emerged as the star performer, thanks to a high proportion of domestic business and leisure tourism during the summer. Denmark and Norway had a weaker economic recovery and were also affected by an increase in room supply during the year, which had a negative effect on RevPAR development. Eastern Europe has noted healthy occupancy development since this summer but is still lagging behind on room rate growth. The Middle East reported an overall weak result with mixed performances observed in different countries.

2010 RevPAR Y/Y change in local currency

Source: STR Global: Hotel Review December 2010