European cities continue to lead global hotel performance in terms of revenue per available room (revPAR), taking 12 of the top 20 places in the Global Ranking Index (GRI), a report produced annually by Deloitte. However, the growth of tourism in other world regions could see European cities challenged for the top spots next year.

More than 50% of the world’s travellers chose Europe as their preferred destination in 2007, according to the World Tourism Organisation. This led to an overall revPAR increase of 15.8% to US$114 in Europe – the highest absolute revPAR in the world.

Globally, Venice held onto first position in the revPAR GRI for the fifth consecutive year, with revPAR rising 22% to US$265. Other Italian cities to make the top 20 revPAR GRI include Rome, Florence and Milan – more than any other country in the world.

Moscow rose from 7th position last year to 3rd this year. RevPAR was up 23.5%, with rooms now costing more than traditional tourism centres such as London, Paris and Geneva.

Deloitte also ranks the top 20 cities in terms of occupancy. In this year’s occupancy GRI, Belfast made its debut securing 15th place.  The city is enjoying a re-birth as a safe destination after decades of political unrest, and is now attracting many people on weekend breaks as well as business travellers.

Although Edinburgh didn’t secure a place in the top 20 revPAR GRI in 2007, the city remains one of the top performers in terms of occupancy. Achieving 79.3% Edinburgh secured 19th position on the occupancy GRI.

Germany’s tourism benefited from hosting the football World Cup, but few expected the country to maintain such a good performance in 2007. However, occupancy grew 1.8% to 64%, while average room rates rose to US$118. Despite this good performance, no German cities made an appearance on either of the GRI’s this year.

Challenging Europe, the Middle East grew 16.9% to US$108 in 2007 – exceeding growth in both Europe and Asia for the fourth consecutive year. It  is therefore not surprising that four Middle Eastern cities featured in the top 20 revPAR GRI including Dubai, Doha, Abu Dhabi and Muscat. 

Muscat, which is marketing itself as an upmarket Middle East experience, saw revPAR rise almost 36% in the past 12 months, securing 16th place and making its debut in the ranking tables.  In 2000 it ranked in 110th position.

Dubai has one of the highest average room rates in the world at US$258, a figure that is still rising – up US$34 on 2006. Its occupancy levels are also amongst the highest in the world at 84.5%, enabling the city to secure a place in the top 5 on both the revPAR GRI and occupancy GRI.

More than 185m international tourists visited Asia Pacific in 2007 – an increase of 10% on the previous year. In 2007, revPAR across the region rose 12.9% to US$95 – driven by average room rate increases, as strong consumer demand is giving hoteliers the confidence to charge more. As a result of this tactic, Asia Pacific took four places in the top 20 revPAR GRI in 2007, while securing nine places on the occupancy GRI. Hong Kong, Mumbai, Sydney and Tokyo made an appearance on the top 20 revPAR GRI. With the help of a high profile advertising campaign, six Australian cities figure in the occupancy league table.

Across Central and South America, revPAR increased 19.4% to US$74 in 2007 – which meant it is the world’s fastest growing region in terms of revPAR growth. Panama City, with occupancy rates of 84.7%, has become the first Latin American city to make it onto the occupancy GRI, the second highest occupancy of any city in the world. The city also achieved the strongest revPAR growth in Central and South America – up 37.9% to US$121.

Commenting, Marvin Rust, Managing Partner for Hospitality in Deloitte UK said: “There were around 900 million travellers in 2007 and across the globe, hoteliers have benefited from this increase. Strong economic growth in most regions, particularly in China and India, is an important factor. Central and South America has also seen strong demand this year, particularly from US travellers who are keen to get good value for money closer to home.”

Looking ahead to 2008, Alex Kyriakidis, Global Managing Partner of Tourism, Hospitality & Leisure at Deloitte said: “The outlook for the global hotel industry is promising. 2008 will see a number of sporting events across the globe, attracting large numbers of travellers, particularly the Beijing Olympics. Major developments in the aviation industry – including the continuing expansion of low-cost airlines and the introduction of the Airbus A380 – will also enable travellers to move more freely around the globe.”

“Enthusiasm for travel could also be tested, as consumer confidence falters in line with a weakening economy in the US and some Western European countries. However, not all regions will be impacted and, over the past few years, there has been a remarkable resilience among tourists to terrorist threats, stock market jitters and health scares,” he said.

Download the press release with associated graphs (PDF, 190KB)

Ends

Notes to editor:
This is Deloitte’s fifth edition of the Global Ranking Index which compares the performance on 165 cities outside North America.
Further analysis can be found in Deloitte’s Global Ranking Index: http://www.deloitte.com/globalrankingindex2008 

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.  The information contained in this press release is correct at the time of going to press.