European Hotels Experience Mixed Performance in July 2025

European hotels reported a mixed performance in July 2025, with occupancy rates slightly increasing but a decline in revenue per available room (RevPAR) compared to the same period in 2024.

As reported by HSMAI Europe and MKG, in July 2025, European hotels faced a complex performance landscape, with occupancy rates increasing by 1.3 percentage points compared to July 2024; however, overall RevPAR declined by 2.3%. The mid-range and upscale hotel segments saw the most significant growth in RevPAR, with increases of 2.1 and 1.8 percentage points, respectively. However, the average daily rates (ADR) across the board fell by 4%, with the economy segment experiencing a sharper decline of 5.4% due to price-sensitive clientele.

The shift in consumer preferences towards alternative accommodations, such as seasonal rentals, is a notable trend impacting the hospitality sector. Eurostat data indicated a substantial rise in bookings through seasonal rental platforms in 2024, a trend anticipated to persist into 2025.

Spain’s hotel market demonstrated resilience, with a 3.3% increase in RevPAR, supported by a stable occupancy rate that rose by 0.5 percentage points and maintained ADR growth of 2.7%. Coastal destinations in Spain continue to attract a steady stream of tourists, although the pace of growth has slowed.

Conversely, Italy and Portugal faced challenges. Italian hotels experienced a 1.1 percentage point decline in occupancy, accompanied by a 4.4% decrease in ADR, resulting in a 5.5% decline in RevPAR. In Portugal, the occupancy rate increased by 0.8 percentage points; however, a 2% decrease in ADR resulted in a 1% reduction in RevPAR.

Greece stood out with the highest RevPAR growth in the region, achieving a 15.4% increase, driven by a 20.7% rise in ADR, despite a 3.7 percentage point drop in occupancy. Greece, along with Spain, effectively leveraged pricing power to enhance revenue.

In Germany, the decline in hotel performance slowed compared to June, thanks in part to events such as Travemünde Week, which attracted over 500,000 visitors. Nevertheless, RevPAR decreased by 9.1% compared to July 2024, when the Euro Football Championship had boosted performance. The country’s economic challenges continue to affect the domestic leisure and corporate markets.

France, after a recovery in June, saw a 5% drop in RevPAR. Although occupancy increased by 2.3 percentage points, hoteliers reduced ADR by 8% to remain competitive in attracting leisure travelers.

The United Kingdom experienced a rebound, with occupancy rates increasing by 2.6 percentage points and stable ADR, resulting in a 3.9% rise in RevPAR.

Overall, five years after the COVID-19 pandemic’s impact on tourism, European markets are entering a phase of normalization. While some markets, such as Austria, the Netherlands, and Hungary, showed positive performance compared to July 2023, the hospitality sector continues to navigate evolving consumer preferences and economic conditions.