The European hotel industry in February 2025 demonstrates a changing landscape, with Eastern Europe showing the most significant growth in Revenue per Available Room (RevPAR) and general stability across the continent.
As reported by HSMAI Europe, in February 2025, the European hotel industry experienced diverse geographical dynamics, leading to an overall shift in market fundamentals. Despite the varying regional performances, stability was the overarching theme across the continent.
The performance across different segments of European hotels was largely consistent. Occupancy Rates (OR) ranged between -0.1 and 1.9 points, displaying a stagnant trend. International customers primarily drove the mid-market and upscale segments, resulting in RevPAR growth of 2.7% and 3.2%, respectively. The favorable euro/dollar exchange rate also played a role in attracting customers whose currency is pegged to the dollar. The budget and economy segments maintained stability without compromising on average daily rates.
Eastern Europe stood out with the three most significant increases in RevPAR. Hungarian hotels witnessed a 17% rise in their RevPAR, courtesy of a 5.6-point increase in OR and a 5.8% increase in Average Daily Rates (ADRs). As a result, occupancy reached 58.3%. Latvia followed with a 13.3% increase in RevPAR and the highest OR growth at 10.2 points. However, a decrease in ADRs by 6.6% rendered the destination the most competitive. Poland completed the top three with an 8% increase in RevPAR, driven by a 4.5% rise in ADR and a 2-point increase in OR.
The Alpine regions also experienced a boost with Austria recording a 5.2% RevPAR increase, welcoming 175,000 attendees to the FIS Alpine World Ski Championships Saalbach 2025. Switzerland, too, benefited from its Alpine appeal during the winter sports season, with an increase in OR by 3.1 points.
Despite a slowdown in Spain and Portugal, Southern Europe saw Italy perform well, with a 5.9% increase in RevPAR. Major events such as the Milan Fashion Week and the Carnival festivities in Venice significantly influenced this growth.
Core European markets, including Germany and the Netherlands, also performed impressively. Germany continued its upward trend from January, with a 6.8% rise in RevPAR. The Netherlands recovered from a slump in January, with a 3.9% increase in RevPAR. The United Kingdom also fared well, with a 1.2% increase in RevPAR.
While the hotel industry’s performance in February 2025 was largely driven by economic factors, the underlying structure of the European hotel business is gradually shifting. The southern countries have started matching northern ones in average daily rates, paving the way for Eastern European destinations.
