DACH hotel sector outshines serviced apartments in Q4 revenue boom

The final quarter of 2023 painted a rosy picture for the DACH hotel sector, with high demand sending revenues 13.7% higher year-on-year compared to a modest 0.3% increase for serviced apartments.

German, Austrian and Swiss hotels witnessed rapid growth between October and December, bucking inflationary pressures and capping off a strong year. While occupancy rates climbed a healthy 5.3%, the key boost came from a 4.3% jump in average daily rate (ADR) to €95.11, indicating healthy seasonal demand for traditional hotel stays. RevPAR was €62.90 in Q4. 

This resulted in 9.9% revenue growth over the full year, while ADR and occupancy were up 5% and 4% in 2023 respectively.

However, a seasonal slowdown saw a contraction in the quarter-on-quarter performance, with hotels witnessing a 16.1% drop in RevPAR between Q3 and Q4 2023. ADR declined 7.3% while occupancy fell 12.2%. 

Serviced Apartments

The story for serviced apartments is more complex. Apaleo's analysis of 3.7 million bookable nights shows hotels performed much stronger than DACH’s serviced apartments in the final quarter of the year, as well as across the whole of 2023. 

Although the year wasn't a washout – 7.6% annual RevPAR growth for 2023 is impressive – the final quarter saw serviced apartment occupancy rates slip 5.4%, which helped to offset a 3.9% increase in ADR to €97.91. RevPAR rose just 0.3% quarter-on-quarter, settling at €75 in Q4. 

Looking at the year as a whole, the DACH serviced apartments saw greater ADR improvements than hotels, rising 11.1% year-on-year, hampered by a drop in occupancy (-3.9%).

Serviced apartments also saw quarter-on-quarter seasonal declines with RevPAR down 13.6%, ADR down 7.8% and occupancy down 6.7%.

Martin Reichenbach, CEO of Apaleo, said: “The latest DACH data suggests that there was a real appetite for hotel stays in the final quarter of the year, with travellers fuelling demand for more traditional stays. However, both accommodation categories experienced impressive growth over the course of the year and there’s good reason to be optimistic about what 2024 will hold. 

“A strong DACH business travel rebound is likely fuelling hotel growth, particularly in major cities, with the sector able to capitalise on the travel industry’s final return to ‘normal’ last year. Despite ongoing inflationary pressures and cost of living issues, travel demand has proved surprisingly resilient and we suspect we’ll continue to see this demand rise this year if these headwinds continue to ease.” 

Source: Analysis of 3.7 million bookable nights on the Apaleo management platform January 2022-January 2023.