H EU Report Europe

DECEMBER 2015

ANALYSIS OF HOTEL RESULTS – DECEMBER 2015 Major disparities in Europe, from one hotel market to the next On the last month of 2015, certain European markets regrouping an important share of the hotel supply on the continent were hard hit by repercussions from the terrorist attacks in Paris on November 13, leading to stagnation of Europe's hotel activity despite the sector’s dynamism in several countries and on secondary markets. Europe's hotel industry stagnated in December, producing zero change in the Revenue per available room (RevPAR), which remained 49.6 euros. The 1.6% improvement in the average daily rate to 86.3 euros only made up for the 1 point drop in occupancy, which fell to 57.5%. This phenomenon overshadows the strong impact of the attacks on November 13 on a limited number of markets that weigh down results for Europe's chain supply, while many destinations that are less represented on the continent stood out with double-digit growth in their RevPAR. In terms of hotel categories, the 4* played a determining role in maintaining positive growth in RevPAR performances (+0.7%), such as the 2* with +1.3%. The 3* segment was able to post results similar to last year's (-0.3%), which the 5* (-2.8%) segments were not able to do. Although the impact of the terrorist attacks in Paris were attenuated by the arrival of World Leaders for Cop21, the impact of them on France's hotel industry (RevPAR -7.5%) was evident in December. In addition to Paris, which was directly impacted by canceled reservations, Lyon suffered from the cancellation of its traditional Festival of Lights further to a decision made the day after the terrorist attacks. London was also affected by repercussions from the events in Paris, and closed the month with a 2.8% drop in its RevPAR. Considering the weight of the Greater London marketplace on the hotel market, this drop compensates the very positive dynamic of secondary British cities, leading to limited growth in the RevPAR in the country of Her most Gracious Majesty (+0.9% in December). The impact of these events was particularly strong in Belgium (RevPAR -18.2% on the month), even if the country produced globally positive results for the year 2015 (+4.5% on 12 months). In Germany, developments in activity in December were variable from one city to the next (5% drop in the RevPAR in Munich, +1.6% increase in Berlin, stagnation in Frankfurt...). Although growth was weaker than in previous months, the country overall maintained positive growth in its activity with a RevPAR up by 2% in December 2015. But after the tragic events in Germany on New Year's Eve, the country also saw challenges arise in the ensuing weeks for its tourism activity due to security issues. While Greece's hotel industry (-0.6% in the RevPAR) continued to face a complicated situation, particularly with the arrival of migrants from Syria, most other European destinations came out of the period on top. Luxembourg's hotel industry (+13.1% of the RevPAR), for example, continued to benefit from its presidency of the European Union during the last month of its mandate. The Czech Republic (+14.8% of the RevPAR), Spain (+13.3% of the RevPAR), Poland (+11.3% of the RevPAR) and the Netherlands (+10.1% of the RevPAR) are other destinations that posted double-digit growth on the period. Particularly noteworthy: in the Netherlands and Spain alike, "secondary" destinations posted better growth in their performances in that month, meaning that the domestic hotel context improved under the effect of their economies' rebound, while major urban markets were penalized this month by their higher volume of long courier clientele scared off by the security tension in Europe. While the consolidated trend in Europe's hotel industry is thus towards stagnation, the different markets followed very different trends in December 2015.

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HOTEL RESULTS BY SEGMENT IN EUROPE – DECEMBER 2015 MONTHLY RESULTS

YTD RESULTS

Occupancy Rate

Average Daily Rate (€ VAT excL)

RevPAR (€ VAT excl)

Occupancy Rate

Average Daily Rate (€ VAT excL)

RevPAR (€ VAT excl)

(pts)

(%)

(%)

(pts)

(%)

(%)

2*

-0,4

2,1%

1,3%

2*

0,9

2,9%

4,2%

3*

-0,8

1,2%

-0,3%

3*

1,1

1,7%

3,3%

4*

-0,9

2,3%

0,7%

4*

1,4

3,0%

5,2%

5*

-2,7

1,8%

-2,8%

5*

1,3

3,5%

5,4%

Global

-0,9

1,6%

0,0%

Global

1,1

2,9%

4,5%

Note : The indicators are compared to the same period of previous year, i.e. January 2015 vs January 2014

OR, ADR and RevPAR change - Last 24 months 15% 10% 5% 0% -5%

01/14

02/14

03/14

04/14

Changes ADR

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05/14

06/14

07/14

08/14

Changes OR

09/14

10/14

11/14

12/14

01/15

02/15

03/15

04/15

05/15

06/15

07/15

08/15

09/15

10/15

11/15

12/15

Changes RevPAR

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HOTEL RESULTS BY COUNTRY IN EUROPE – DECEMBER 2015 Monthly Results - RevPAR change by country DECEMBER 2015 vs DECEMBER 2014

UK +0.9%

PL

NL

+11.3%

DE

+10.1%

+2.0%

BE European average

CZ

-18.2%

+13.6%

-0.0%

LU +13.1%

FR -7.5%

AT CH

+2.1%

HU +8.5%

-2.4%

IT

Sup. to 10% Between 5% and 10%

+2.5%

PT +7.7%

TR

ES GR

+13.3%

Between 0% and 5%

-3.5%

-0.6%

Inf. to 0% MT

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+16.8%

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HOTEL RESULTS BY COUNTRY IN EUROPE – DECEMBER 2015 Monthly Results – Occupancy Rate change by country DECEMBER 2015 vs DECEMBER 2014

UK PL

NL

-0.4 pt

+2.1 pts

-0.1 pt

BE European average

+3.7 pts

DE

-12.1 pts

CZ +3.3 pts

LU

-0.9 pt

+2.4 pts

AT

HU

+0.4 pt

-0.6 pt

FR -3.4 pts

CH -1.9 pt

IT

Sup. to 5 pts Between 2,5 and 5 pts

+0.1 pt

PT +0.1 pt

ES

TR GR

+2.4 pts

+0.5 pt

-1.0 pt

Between 0 and 2,5 pts Inf. to 0 pt MT

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-3.1 pts

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HOTEL RESULTS BY COUNTRY IN EUROPE – DECEMBER 2015 Monthly Results - ADR change by country DECEMBER 2015 vs DECEMBER 2014

UK +1.5%

NL

+3.8%

+2.2%

BE European average

PL

DE

+6.1%

-1.2%

CZ LU

+1.6%

+7.4%

+9.1%

AT

HU

+1.5%

+9.5%

FR -1.6%

CH +0.9%

IT

Sup. to 10% Between 5% and 10%

+2.2%

PT +7.5%

TR

ES +8.3%

GR

Between 0% and 5%

-4.3%

+2.1%

Inf. to 0% MT

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+24.4%

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HOTEL RESULTS BY COUNTRY IN EUROPE – DECEMBER 2015 YTD Results - RevPAR change by country YTD DECEMBER 2015 vs YTD DECEMBER 2014

UK NL

+4.6%

PL

+8.1%

DE +4.4%

BE European average

+9.9%

+4.5%

+4.5%

CZ +14.2%

LU +17.1%

AT

HU

+4.7%

+14.7%

FR +0.2%

CH -0.8%

IT

Sup. to 10%

+11.6%

Between 5% and 10%

PT +13.5%

ES

TR

+12.5%

GR

Between 0% and 5%

-8.6%

+5.5%

Inf. to 0% MT

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+18.1%

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HOTEL RESULTS BY COUNTRY IN EUROPE – DECEMBER 2015 YTD Results – Occupancy Rate change by country YTD DECEMBER 2015 vs YTD DECEMBER 2014

UK +0.4 pt

NL

PL

+2.4 pts

DE

BE European average

+4.9 pts

+1.2 pt

+0.5 pt

CZ

LU

+1.1 pt

+4.2 pts

+1.0 pt

FR

CH

-0.2 pt

+0.5 pt

AT

HU

+0.7 pt

+3.0 pts

IT

Sup. to 5 pts

+2.1 pts

Between 2,5 and 5 pts

PT +3.7 pts

ES

TR

+3.4 pts

GR

Between 0 and 2,5 pts

-0.3 pt

+0.6 pt

Inf. to 0 pt MT

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+2.6 pts

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HOTEL RESULTS BY COUNTRY IN EUROPE – DECEMBER 2015 YTD Results - ADR change by country YTD DECEMBER 2015 vs YTD DECEMBER 2014

UK +4.1%

NL

PL DE

+4.5%

+2.0%

+2.6%

BE +3.8%

European average

CZ LU

+2.9%

+7.2%

+15.5%

FR

CH

+0.5%

-1.5%

AT

HU

+3.8%

+9.9%

IT

Sup. to 10%

+8.2%

Between 5% and 10%

PT +7.7%

ES

TR

+7.0%

GR

Between 0% and 5%

-8.1%

+4.6%

Inf. to 0% MT

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+14.0%

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METHODOLOGY 1

Conventions

The report presents the results of corporate brand hotels in Europe. The sample consists of a total of more than 6,500 hotels, representing more than 800,000 rooms. The breakdown by segment is as follows: 30% for Budget and Economic hotels, 30% for midscale hotels and 40% for upscale hotels. Hotels are classified according to the hotel star system: from 1* to 5*. The category of corporate chain hotels are allocated individually according to MKG Hospitality’s market expertise and reflect the “marketing classification” in complement to the official rating system(s) of the country (if any). The category breakdowns for global supply are taken from MKG Hospitality’s database and from information provided by statistical and/or hotel industry institutions (e.g. associations, unions).

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Glossary o Occupancy rate: Number of sold rooms divided by number of available rooms o Average daily rate: Room revenue divided by number of sold rooms o RevPAR: Occupancy rate x average daily price or room revenue divided by available rooms o Available rooms: Capacity x number of operating days (within a month) o Sold rooms: Capacity x number of operating days x occupancy rate o Room revenue: Room revenue expressed net of VAT (excluding other types of revenue such as food and beverage, etc.)

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