European hotels continue to lead hotel performance on a global scale in terms of revenue per available room (revPAR), with Venice and Paris taking the top two slots in the HotelBenchmark Global Ranking Index (GRI) 2006. The GRI compares the performance of 165 cities outside North America on an annual basis.

Europe staged some of the most enticing sporting spectacles in 2006 – from the Winter Olympics in Turin and the World Cup in Germany – and celebrated the work of Rembrandt, Picasso and Mozart. These events, combined with strong economic performance, helped the region dominate 12 of the top 20 positions in the revPAR GRI. Venice secured first place with revPAR at US$211. Paris, still the romantic capital of the world, saw growth of 14.7% and knocked Dubai into third position.

Edinburgh and Dublin joined in the celebrations again after falling from the top 20 rankings in 2005 and the other positions were secured by the usual suspects such as Rome, London, Moscow and Geneva.

In terms of occupancy, Europe secured eight places on the occupancy GRI in 2006. Amsterdam, with the second highest occupancy levels of any European city at 81.5% remained steady in 11th place. It was popular with both business and leisure travellers last year, staging a programme of events to mark the work of Rembrandt as well as several major conferences and trade fairs. Also making it into the top 20 occupancy GRI were London, Zurich, Edinburgh, Dublin and Rome.

Asia Pacific is in fast forward mode. With the pace of economic growth being forced by China and India, as well as other emerging economies such as Vietnam, it is not surprising that Asia Pacific boasts the title of the fastest growing economy in the world. The region stole four positions on the revPAR GRI this year, with Hong Kong achieving the ninth highest revPAR globally at US$164, followed by Seoul at US$134.

For the first time, India’s key city Mumbai entered the top 20 revPAR GRI and took 13th place with pride. A 41.2% increase in revPAR took it to US$141 and pushed this splendid city up 23 places in the rankings over the previous year.

Asia Pacific wiped the floor in terms of occupancy during 2006, stealing 10 places on the occupancy GRI. Australia alone claimed five places in the rankings, with Brisbane and Melbourne taking first and second place. Brisbane has been ranked in the top six places over the past five years, but 2006 proved to be the best year yet, with an incredible 84.6% occupancy. The Commonwealth Games in Melbourne boosted demand for rooms in Melbourne, pushing the city up 10 places on the occupancy GRI, achieving 83.4%.

Hotels in the Middle East posted their third year of double-digit revPAR growth in 2006, up 16.7% driven by a hike in average room rates. Massive investment in hotels, resorts, air travel and sports facilities have put other regions in the shade and there is no shortage of funds as the Gulf States continue to diversify their economies. However, despite this rapid growth, the Middle East still faces tough competition for inclusion in the top 20 revPAR GRI, securing only four places.

Dubai, the undisputed powerhouse of the Middle East and home to some of the world’s tallest, largest and most opulent developments secured third place on the revPAR GRI. Overtaken by Paris, the city achieved a US$196 revPAR during 2006.

Dubai’s neighbouring city Abu Dhabi also secured a top spot in the rankings at 17th place. Hotel performance in Abu Dhabi was driven mostly by a 45% rise in average room rates, enabling the city to climb 38 places on the revPAR GRI. Once in the shadows of dominant Dubai, Abu Dhabi now leads the Middle East in terms of revPAR growth, up 41.5% in 2006. Doha and Kuwait City were the other two Middle Eastern cities make an appearance in the revPAR GRI this year, securing fifth and 18th place respectively.

Although no cities in Central and South America made it into the top 20 rankings this year, many cities are climbing back from their post-Millennium lows. With both regions exceeding the global average for tourist arrivals by some distance, the hospitality industry is happy and investor confidence is rising. International hotel chains are also setting up home, with cities such as Buenos Aires, Caracas and Santiago seeing the supply of the four and five-star rooms swell.

The carnival capital of the world, Rio de Janeiro leads the region taking 61st place on the revPAR GRI at US$95. On a global scale, the results are more than US$100 less than those of the winning city Venice and provide some perspective as to why the city is featured so far down the rankings. Buenos Aires and Mexico City follow closely behind Rio de Janeiro, in 69th and 70th place respectively.

Commenting on the results, Lorna Clarke, Executive Director of HotelBenchmark at Deloitte said: “2006 has been an excellent year for the hotel industry with many regions managing to achieve double-digit growth – and some seeing this for the second and third consecutive year. The results throw up some interesting pointers on how the global hotel market is shifting. The strength and emergence of new destinations is becoming even more apparent, as Mumbai enters the revPAR GRI for the first time. Both China and India remain huge potential hot spots in the global tourism arena and we can expect more markets from these countries to put in an appearance over the coming years.”

Related Link: Deloitte - Travel Tourism & Leisure