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In 2007 the Lisbon hotel services sector recorded the biggest increase in the average price per available room
18 Jan, 2008, Lisbon
2007 was a year of exceptional development for the hotel services sector in the EMEA region (Europe, Middle East and Africa), with emphasis on the city of Lisbon, the leader of the ranking of destinations with the biggest increase in RevPAR (average price per available room), with values in the order of 25.5%.
In absolute terms, Dubai, in the United Arab Emirates, overtook Moscow and now has the highest RevPAR throughout the region, around €219. Despite the decline of the RevPAR in the Russian capital (-8.2%), Moscow still has the highest average price per room throughout the EMEA region, around €300.
These results were presented by The Bench together with the global real estate consultant Cushman & Wakefield (C&W), at a hotel investment conference held last Tuesday in London.
The increase in the average price per available room in Lisbon (25.5%) is due in large part to Portugal’s presidency of the European Union in the second half of 2007. Cities such as Oslo and Barcelona, with increases in the RevPARs in the order of 16.8% and 14.5%, respectively also present good results. In addition to Moscow, the only other city with a negative evolution of this indicator was Frankfurt in Germany, where the average price per available room showed a decrease of 2.7%. However, the average price per available room amounted to around €72, thus still considerably above Lisbon.
In the United Kingdom, London saw an increase in the RevPAR of 10.2%, the average price per available room being around €160.
According to Jorge Catarino, partner and head of hotel services at Cushman & Wakefield in Portugal, “The growth experienced in Lisbon is justified not only by the country’s presidency of the EU in the second half of 2007, but also by the increase in the number of tourists visiting the Portuguese capital, strengthened by the increased number of low-cost flights offered by airline companies.”
Commenting on the results of the study in more detail, Jorge Catarino refers to the fact that “the Middle East continues to defy certain critics, with growth in the average price per available room in excess of 12%, largely due to the interest generated by Dubai. The performance of this region clearly reflects the strength of its governors and investors in diversifying their economies and revealing the enormous potential as a top-notch international tourist destination.”
To summarise, Jorge Catarino concluded that “2007 was generically a good, or very good year in terms of the operational performance of hotels in Europe and the Middle East, and I predict that the good levels of operational performance will continue this year.”
Finally, in relation to hotel investments in Lisbon, Jorge Catarino emphasised that “the significant increase in the average price per available room recorded in Lisbon is especially important as, after several years of relative stagnation (or even a reduction in real terms), it is expected that the increased activity will effectively translate into substantially higher margins than those that have applied historically. Additional consequences are that this increase will make it possible to reduce debts and to proceed with essential investments of updating and modernisation, as well as to improve the services provided and investor returns. In parallel, it will contribute substantially towards making hotel investments viable and improving the competitiveness and positioning of Lisbon as a destination in European terms.”