International arrivals of foreign residents at the Athens airport recorded double digit growth in each month of the last quarter of 2019. In total 6.4 million foreign residents arrived in 2019, an increase of 12.0% y-o-y.
Despite this surge in demand, performance of the Athenian hotels in 2019 was under pressure.
Except for August all other months showed declining occupancy. Room rates increased by just 0.9% y-o- y in 2019, RevPAR dropped by 1.4% y-o-y in 2019. Hotel room supply in the centre of Athens has grown significantly during the past years (see below), while the Short-Term Rental market stays strong in term of supply. Properties with a rooms-to-let license are increasing. Our pipeline for upcoming hotel openings shows that thousands of hotel rooms will be added to supply in the coming years.
The hotel sector of Rome recorded an improvement of its RevPAR in 2019 by 1.9% y-o-y, while Madrid had an exceptional year (see our newsletter of Q3 2019) with an increase of RevPAR in 2019 of 12.7% y-o-y.
Contrary to Athens, the fourth quarter of 2019 for the hoteliers in Thessaloniki was robust with an increase of RevPAR of 11% y-o-y. For 2019 as whole RevPAR increased by 4.3% y-o-y. Data shows that especially the 4-star sector contributed to this result. Supply in Thessaloniki is expected to increase in the coming period as numerous small and large projects are currently under construction or being developed.
The airports at resort locations registered a flat performance overall. However, there are regional differences as the airports of Kalamata and Mykonos recorded growth in 2019 of 21% y-o-y and 10% y- o-y respectively, while international traffic at Heraklion, the third largest airport of Greece and Chania in Crete decreased in 2019 by 2% y-o-y each.
In line with the performance of the airports, demand at resort hotels in Greece remained flat. In 2019 an occupancy level of 79.7% was achieved, at a similar level of 2018. However, total revenue increased by more than 7% y-o-y in 2019. The 5-star resort sector showed the highest growth in the Total Revenue per Available Room of 10% y-o-y in 2019, while the 4-star sector remained flat and the 3- star resort segment improved by 5.9% y-o-y.
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