Direct Bookings Carry Lowest Cancellation Rates In Europe

Seven trending hotel news stories that will impact your hotel Revenue Strategy. 

1. European OTA Cancellation Rates Top 50%

Up to 40% of on-the-books revenue is cancelled before arrival, a recent study by Accor-owned D-Edge Hospitality Solutions has found. The research, which analysed the online distribution performance of 200 different channels for 680 properties in Europe between 2014 and 2018, reported that the average cancellation rate in 2018 was 39.6%.

Booking Holdings (owner of Booking.com) had the highest cancellation rate of the online travel agencies (OTAs) at 50%, while Expedia Group (Hotels.com and Expedia) was 26.1% in 2018. Direct bookings had the lowest cancellation rates at 18.2%.

The study also found that reservations with a lead time of more than 60 days were 65% more likely to cancel.

Full story at Hotel Management.

2. Revenues Up As Occupancy Dips In Europe

First quarter stats from STR showed that the European hotel industry recorded a 0.2% drop in occupancy to 63.7%, while revenue per available room (RevPAR) rose 1.3% to €64.56 and average daily rate (ADR) increased 1.6% to €101.28.

Madrid recorded the highest absolute occupancy and RevPAR levels for the region, thanks to a 4.4% rise in demand created by major events hosted in the market. Madrid recorded a 2.6% gain in occupancy to 71.1% and an 8.4% uplift in RevPAR to €75.95. ADR was up 5.7% to €106.79.

In comparison, Athens saw a 9.2% decline in demand in the market. Q1 2019 saw occupancy drop 11% to 54.5% while RevPAR fell 9.3% to €56.32. ADR made marginal gains at €103.34, up 1.9%.

Full story at Hotel New Now.

3. Revenue Declines For Middle East Hotels

Hotels across the Middle East have reported an 8.8% drop in ADR to $148.43 for the first quarter of 2019, compared to $158.96 in 2018. RevPAR also dropped by 7.9% to $105.33, down from $114.68 last year.

Hotels in Africa reported a more positive start to the year, with ADR up by 2.2% to $116.64 and RevPAR up 3.5% to $69.31.

Full story at Hotelier Middle East

4. Sustained Growth Expected For Europe’s Tourism Industry

Arrivals to Europe grew 6% in 2018 with a further 3.6% growth expected in 2019, according to the European Travel Commission’s latest quarterly report. Already, many destinations have reported a strong start to the year with Q1 increases in international arrivals and overnight stays.

Montenegro, which invested in improving its winter infrastructure, posted a 41% increase in arrivals for the first quarter of 2019. Turkey and Ireland both posted a 7% increase in international arrivals for the period. Portugal saw similar growth, with overseas arrivals up 6%.

Inbound markets showing the most potential include China and the US, with destinations such as Cyprus, Slovenia, Malta and Turkey benefiting.

Full story at Breaking Travel News.

5. UK Hotels See Regional Declines As London Reaps Fortunes

Regional hotels felt the pinch in the opening quarter of 2019, with Q1 data showing a 2.8% drop in RevPAR to £44.04, while average room rate fell 2.1% to £64.95 and occupancy dropped 0.7% to 68%.

This performance contrasted with London’s fortunes, where hotels enjoyed a 3.6% gain in RevPAR, average room rates rose 1.9% to £134.05 and occupancy jumped 1.7% to 77%.

Full story at Hotel Owner

6. Ability To Change Vital To Success

The ability to change and the foresight to hire those capable of change were key take-aways from HSMAI’s recent European Conference, as leaders from Accor, NH Hotels, Cornell University, BlueBay Hotels and Nordic Choice debated the top issues impacting revenue.

Fernando Vives, chief commercial officer at NH Hotel Group, said that, in addition to changes in personnel, urgent changes were also needed in the distribution process. Vives explained how NH had devised a new strategic pricing framework, a new room-type structure and a new rate-code structure, in a bid to leverage RevPAR.

Full story at Hotel News Now.

7. Profit Drops For Third Consecutive Month In UK

Profit at UK hotels took yet another hit in March, as properties reported a 0.7% decline in gross operating profit per available room (GOPPAR) to £46.98 – the third consecutive month of decline.

Yet the GOPPAR drop came in contrast with a 1.3% increase in RevPAR for the month, which contributed to an overall 1.7% increase in RevPAR for Q1 2019.

Rising costs were noted as a main contributor to the widening gulf between RevPAR and GOPPAR at hotels in the UK.

Full story at HotStats

Stay up on hotel Revenue Strategy news and discuss industry tech trends in the Hotel Revenue Strategy Leaders Group on LinkedIn.

Sarah McCay Tams, Director of Content, EMEA

Sarah joined Duetto in 2015 as a contributing editor covering Europe, Middle East & Africa (EMEA). In 2017, she was promoted to Director of Content, EMEA. An experienced B2B travel industry journalist, Sarah spent 14 years working in the Middle East, most notably as senior editor – hospitality for ITP Publishing Group in Dubai, where she headed up the editorial teams on Hotelier Middle East, Caterer Middle East and Arabian Travel News. Sarah is now based back in the UK.

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