According to HSMAI Europe and MKG Consulting, the European hotel industry showcased mixed performances in March 2025. Eastern Europe and the Mediterranean displayed strong RevPAR growth, while Western Europe, particularly France and the Netherlands, struggled due to external factors.
March 2025 painted a complex portrait for the European hotel industry. Several segments saw variations in their performances, notably the budget and economy sectors. Domestic customers, impacted by the economic climate, were less able to increase their stays. While Eastern Europe enjoyed robust growth, other regions, such as North-Western Europe, found it challenging to revert to a positive trajectory.
Market Segments
The performance of European hotels is highly inconsistent across different sectors. Following a brief return to stability in the prior month, the budget and economy segments slipped back into a negative trend, with RevPAR showing falls of -10.2% and -2.4% respectively. The mid-scale segment also witnessed a minor dip in performance (-0.5%), while the upscale segment managed to evade this downward trend (+0.9%), largely due to international customers.
Eastern Europe vs Southern Europe: A Continued Rivalry
Once again, Eastern Europe demonstrated its vitality with two of the strongest RevPAR increases. Latvia and Hungary continued to be in the top three performers, as in February, but were joined this time by Greece, which dramatically overturned the previous month’s trend.
Western Europe: A Lagging Performance
The lowest performers were in the West, except for the Czech Republic, which saw a RevPAR fall of -13.4%. The Czech Republic led this unenviable list, closely followed by France (-4.3%) and the Netherlands (-3.7%).
A Landscape of Contrasts
In March 2025, European hotel performance displayed significant disparities. Regions like Eastern Europe and the Mediterranean, with destinations like Latvia, Hungary, and Greece, posted robust RevPAR growth. However, some destinations in Western Europe, notably France and the Netherlands, saw their performance suppressed by various external factors.
