- Three month cycle in previous militant attacks
- RevPAR not affected as badly as occupancy
- Research based on major city attacks in Madrid, London, Paris and Brussels
STR analysis of the four most recent instances in which a major European market was attacked by militants, the 2004 train bombings in Madrid, London, Paris, and Brussels, found that the incidents had a greater impact on occupancy levels than on ADR, or average daily rate.
In London in 2005 hotels experienced average year-over-year rate growth of 3.2pc in the three months following the July 7 attacks on the city’s transit system. Occupancy, on the other hand, dropped by 15.1pc, 5.2pc and 1.9pc in the individual months before rising 1.0pc in November.
According to STR, hoteliers typically do not attempt to recapture occupancy levels with lower rates following a militant attack as tourists are likely to avoid the market regardless of price.
After the March 2004 train bombings in Madrid, occupancy fell 12.7pc in April in comparison with the same month the previous year. May and were down 7.2pc and 7.5pc, respectively. The rate of decline was less depleted n July at 5.5pc.
ADR trended in the opposite direction with a 7.4pc decrease in April followed by an average decrease of 13.5pc over the following three months.
The three-month recovery pattern for occupancy was repeated in Paris following the November 2015 attacks. After three months of decreases averaging 13.1pc, March 2016 produced an absolute occupancy level of 71.7pc, down just 4.8pc decrease from the same month in 2015. Paris’ ADR fell 1.8pc on average between December and February before climbing back to nearly flat (-0.4pc) in March. Occupancy and ADR combination led to a 5.2pc year-over-year decline in RevPAR, revenue per available room. This was the slightest RevPAR decline Paris has experienced since November 2015, indicating that Paris’ hotel market may be in the early stages of recovery.
After the attacks on 22 March 2016, Brussels’ occupancy levels dropped 19.6pc to 57.7pc for the entire month, a sharp decline from the market’s average March occupancy level of 68.7pc (based on historic data spanning 2000 to 2015). In contrast ADR remained positive (+1.1pc to €121.65) and in line with historic levels.
STR’s daily data showed that on March 28, the Monday after Easter, Brussels experienced its lowest absolute occupancy level (-72.6pc to 19.5pc) of any day following the attack. ADR for the day was down 18.2pc to €94.98.
Brussels was also heavily affected by the November attacks in Paris, so data through February may indicate this market’s recovery patterns. Following the lockdown the Brussels government enacted from November 21-25, Brussels’ occupancy declined by double digits for 16 consecutive days, falling by as much as 62.6pc. Between November and January, Brussels posted an average monthly occupancy decline of 17.0pc. Then in February, occupancy was down just 2.3pc. ADR during this time fluctuated but grew in year-over-year comparisons for three of four months.
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