China, US and Middle East Lead Hospitality Recovery – Report

Hotel occupancy are still down at the bottom in many markets in Europe


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Reports from hospitality data analysts STR, on hotel occupancy has shown that China, the US and Middle East are leading the global recovery in hospitality with Europe and Asia way behind.

According to the report, hotel occupancy are still down at the bottom in many markets in Europe.

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Following the decline of locally transmitted COVID-19 cases, the introduction of prevention and control measures and series of successful promotional campaigns of domestic destinations by the local provinces, data shows that more people are beginning to feel comfortable traveling around.

STR managing director Robin Rossmann forecast “a surge of demand” from June and into the third quarter of the year (July-September).

Rossmann said: “China recovered pretty much to the level of 2019 by the end of 2020. Occupancy dipped in the New Year, but is back up to 80% of 2019 occupancy. The US is at about 80%.

“The Middle East peaked around December-January and is now at 65% occupancy. Europe is at 20%.”

He reported revenue per available room (RevPAR) in Europe in April was 27% of the 2019 rate. That compared with 84% in China, 64% in the US, 66% in the Middle East and 38% in Asia.

“The Middle East and China are back pretty much at 2019 rates, driven by rate growth at the top end of the market. The top end has shown the strongest recovery,” he said, adding that Dubai shows recovery which will not have to be based on sacrificing rates.

Rossmann reported hotel occupancy in Israel went from 10% to 50% in two weeks in April and said: “Israel shows markets can recover quickly when a high proportion of the population is vaccinated.”

“The recovery will differ based on the type of demand. The third quarter will see a massive leisure recovery [in Europe]. [But] it’s likely to be the best summer for hotels not reliant on international travel.

“As long as Europeans can travel, Spain will bounce back. Leisure travel and weekends will drive demand in Europe.”

Rossman said that Business travel will take some time.

“There will be pressure from the top to reduce business travel. But the focus will be on reducing one-day trips, which is not necessarily bad for hospitality. Perhaps there will be less travel for internal meetings. Travel to meet clients will remain.

“There is events business on the books, but it is tentative. The focus will be on domestic events. Big international events will take longer to come back.”

STR forecasts business travel demand in Europe will recover to 50% of its 2019 level by the end of 2020 and to 70% in 2022.

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