The year 2011 closes with positive indicators for hotel business throughout the European Union, with an average of 5.5% growth in the RevPAR as a result of increased occupancy combined with growth in average daily rates. And yet, the dynamic that was seen until Spring 2011 slowed in the last quarter, ending on a first decline last December. Europe is facing the challenge of renewing its hotel supply and of taking back control over distribution by the hotel operators.

1. COMMUNIQUÉ DE PRESSE
PRESS RELEASE
Wednesday, February 1st 2012
Hotel operations in Europe
European hospitality results 2011:
betwixt satisfaction and
a question mark
The year 2011 closes with positive indicators for hotel business throughout the
European Union, with an average of 5.5% growth in the RevPAR as a result of in-
creased occupancy combined with growth in average daily rates.
And yet, the dynamic that was seen until Spring 2011 slowed in the last quarter,
ending on a first decline last December.
Europe is facing the challenge of renewing its hotel supply and of taking back control
over distribution by the hotel operators.
Year 2011 - RevPAR Global Europe : +5,5%
+1.8%
+5.6%
+5.8% +6.1%
+4.4% +9.3%
+6.1%
+6.7%
+5.8%
+4.1%
+6.9%
+3.8%
+7.1% +6.9%
Source : MKG Hospitality - January 2012
Tel : +33 (0)1 56 56 87 87 • Fax : +33 (0)1 56 56 87 88 • 50 rue Dombasle • 75015 • Paris • France
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February 2012

2. It is important to observe that for the 27 countries in the European Union, the results of
the hotel business for 2011 are positive. No country closed the year with a downturn for
its reference indicator –the RevPAR– even if there is a broad range between stabilization in
Sweden (+1.8%) and strong improvement in Poland (+9.3%), which occasionally benefited
from its presidency of the Union. The European countries with the strongest hotel activity
–United Kingdom, France, Germany or the Benelux– are positioned within a tighter range:
between 4.5% and 6% growth, which better reflects the state of Europe’s marketplace.
With an average European occupancy rate higher than 66%, hotel occupancy gained 2
points over 2010, which was already in a strong recovery over the crisis of 2009. The prize
goes to the international gateways, capitals and business cities: Amsterdam, Berlin, Ham-
burg, London, Munich or Paris, which flirt with or surpass an OR of 75% across the year.
With an OR close to 85% London beats all records, and is close to saturation, stimulating
the whole of UK’s performance with 75%. At the bottom of the table, OR in Italy, Spain
and Poland reflect the difficulty of the national markets. The only two drops in occupancy
with respect to 2010 (Sweden and Austria) are less than 1.5 point.
This strong demand justified a significant improvement in the average daily rate (over 2.5%
for the whole of Europe), with higher performances, around 6%, in Austria and Portugal. Ge-
nerally speaking, it is the good results in upscale hotels that has allowed this progression.
December 2011 - RevPAR Global Europe : -0.9%
-4.2%
-12.1%
-2.1% -5.7%
+2.7% +7.0%
-4.8%
+17.7%
+1.0%
+10.3%
+20.8%
-1.8%
-16.7% -2.7%
The question mark bears on the slump observed in year-end business. The downturn of
growth in the RevPAR since autumn 2011 was not brought to a halt by Christmas celebra-
tions and the level of business in December 2011 dropped back below that of December
2010. While marginal, this drop in the RevPAR by 0.9% brings to a close nearly two years
of positive change after the severe shakeup in 2009.
Tel : +33 (0)1 56 56 87 87 • Fax : +33 (0)1 56 56 87 88 • 50 rue Dombasle • 75015 • Paris • France
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MKG Hospitality Paris - London - Berlin - Nicosia - Melbourne www.mkg-hospitality.com
Février 2012

3. Globally in Europe the two business indicators came to a halt in their uptrend and it may be
feared that the negative result of December 2011 will continue in the early months of 2012.
However, not all of Europe has swung like a single body into the red, and contrasting si-
tuations persist in two countries with a strong hotel capacity –France and Germany– where
the RevPAR continues to progress slightly but at a rate slower than that at the beginning
of 2011. In the same way, Central European countries are also progressing, particularly
Poland, the Czech Republic, Austria and Hungary, but at relatively low performance levels.
Highly dependent on international clientele, the Benelux countries, as well as the United
Kingdom, already posted negative changes since last November, entering the downturn a
bit earlier, particularly thanks to a significant drop in average daily rates. The capitals re-
sisted better, especially London, but the weight of the other regions, which were hit hard
by the effects of the financial crisis, has a strong impact on national results. Countries in
Southern Europe, which also prematurely sank into the debt crisis of the different States,
were impacted by the kickback of a failing economy and an obvious drop in business travel.
«The beginning of 2012 looks rather difficult, but we remain confident that there will be a positive
RevPAR growth over the entire year, between 2% and 4%” commented Georges Panayotis, Pre-
sident of MKG Group. “The Olympics in England will positively affect the second semester 2012
in a chain effect while the calendar for trade shows in Germany is looking good. The question lies
on the ability to maintain a positive economic growth, which feeds the number of business trips.”
The President of MKG continues: “In a major country like the United States, tourism has become
a strategic economic stake, as President Obama has indicated. Over there, hotel groups unite to
fight against third party domination found on the web that is operating a true hold up on hotel dis-
tribution and the business activity of many hotels. We are waiting for the same thing to happen in
Europe: a continent that is known to have surpassed the business of Boeing with Airbus. National
policies are still too shy to encourage the development of hotel supply. In all of Europe, the supply
is stagnant, even regressive, and absolutely needs to be stimulated.”
METHODOLOGY
For 25 years, MKG Hospitality has been a global leader in tourism, hotel and catering consulting, with the largest database in the
world (excluding the US), representing all segments from budget to upscale hotels. 45 000 hotels and over 2.5 million rooms are
compiled in MKG’s database.
MKG’s market monitoring database, HotelCompSet, contains a sample of over 250 brands in 150 countries (over 800 markets) and
11 000 corporate chain hotels, representing more than 1,000,000 rooms. HotelCompSet provides daily, monthly and yearly monito-
ring of hotel indicators and analyses of its sample.
MKG’s statistical samples provide a comprehensive and accurate measure of the hospitality industry.
Together with other specialised brands, MKG Qualiting, OlaKala, Worldwide Hospitality Awards, Global Lodging Forum, as well as
sector publications HTR Magazine and Hotel Restau Hedbo, MKG Group supports investors, hoteliers and key tourism players to
improve performance, boost productivity and achieve results.
For further information, please contact:
MKG Group - International Development Department
Vanguelis Panayotis T. : +33 (0)1 56 56 87 87 • F. : +33 (0)1 56 56 87 88
email: v.panayotis@mkg-group.com
Tel : +33 (0)1 56 56 87 87 • Fax : +33 (0)1 56 56 87 88 • 50 rue Dombasle • 75015 • Paris • France
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MKG Hospitality Paris - Londres - Berlin - Nicosie - Melbourne www.mkg-hospitality.com
Février 2012