Interim results for summer 2024: Stable booking forecasts in South Tyrol and Bavaria, stagnation in Tyrol

Positive price enforcement in the Alpine region region.

The summer in the Alpine vacation hotel industry is at halftime, but how have the booking forecasts developed so far? Demand in South Tyrol and Bavaria remains stable at the previous year's level, while Tyrol is lagging behind and needs to catch up. The increase in price enforcement to date has tended to improve and is showing positive signs throughout the Alpine region. All this is shown in the latest fact check by Kohl > Partner and RateBoard.

Thomas Steiner, Managing Partner of Kohl > Partner, in collaboration with RateBoard, a renowned provider of revenue management systems in the Alpine region, has carried out an update on the previous fact check of the preliminary 2024 summer season. A total of 400 premium hotels in the Alpine region were examined. A specific distinction was again made between the destinations of Tyrol, South Tyrol and Bavaria.

Development of occupancy - Alpine region: 

The booking forecasts for hotels in the Alpine region are almost at the same level as last year, with a minimal increase in occupancy of 1% on average. In May, the average occupancy rate was 45%, which corresponds to an increase of 4% compared to the previous year. This is mainly due to public holidays and vacation periods, with Whitsun being less successful compared to the previous year. In June, the unstable weather conditions and the absence of the Whitsun and Corpus Christi vacations in the Alpine region had a noticeable impact, resulting in an occupancy rate of 54%, almost 3% below the previous year's level. The booking forecast for July shows a similar level to the previous year, with a minimal change of -0.5%. The forecast for August indicates an increase of 2%, while growth of 3% is expected in September.

An analysis of the vacation hotel industry's booking forecast for the destinations of South Tyrol, Tyrol and Bavaria continues to show a varied picture:

Development of occupancy - destinations: 

In May 2024, the Bavarian vacation hotel industry recorded the highest room occupancy rate with an average of 61%, 16% higher than in South Tyrol. In Tyrol, the difference was even more pronounced with a difference of 31%. Thanks to public holidays and vacation periods, Bavaria was able to achieve higher occupancy rates compared to the other destinations both during the week and at weekends. In June, Bavaria and South Tyrol jointly achieved the top position with an average room occupancy rate of 60%. According to forecasts, South Tyrol is in the lead for July and August. In the vacation months, there is an average difference of 13% compared to Bavaria and 22% compared to Tyrol. In the fall, the gap between South Tyrol and Bavaria narrows, while the difference to Tyrol remains the same. According to the booking forecasts, Tyrol continues to have the lowest demand.

Development of occupancy - Tyrol:

In the preliminary summer season 2024, demand in the Tyrolean hotel industry is stagnating. Although an increase in occupancy of 5% was achieved in May compared to the previous year, the average room occupancy rate of 30% is still well below the level of comparable destinations. In June, room occupancy fell by 4% to an average of 37% compared to the previous year. The booking forecast for July also shows pent-up demand, with a current year-on-year decline in bookings of 3.8%. This trend continued to some extent in August, with occupancy down 1.3% on the previous year. Autumn, on the other hand, shows an almost identical occupancy rate compared to the previous year with a slight increase of 0.6%.

Development of occupancy - South Tyrol:

In South Tyrol, the booking forecast for summer 2024 is at the previous year's level with a slightly positive trend. Average room occupancy increased by 4% year-on-year to a moderate 46%. In June, however, as in the entire Alpine region, there was a year-on-year decline of 2%, with an average room occupancy rate of 61%. In the classic vacation months of July and August, the forecast predicts an average increase of 2.8%. Growth of 2.6% is expected for September.

Development of occupancy - Bavaria:

In Bavaria, too, a similarly positive trend can be seen in the booking forecast as in South Tyrol compared to the previous year. In May, occupancy increased by 3.3% to an average of 61%. In June, there was a minimal decline in occupancy of 1% compared to the previous year, which is the smallest decline compared to the destinations Tyrol and South Tyrol. The booking forecast for July is 2.2% above the previous year's level. For the months of August and September, an increase of Ø 3% is expected compared to the previous year.

Development of average price - Alpine region:

In summer 2024, the development of average room rates to date shows an average increase in price enforcement of 6.3% compared to the previous year. Hoteliers were particularly bold in May: around the vacations and Whitsun break, room rates increased significantly by 7% compared to the previous year. In June, there was a slight increase of 2.5% in room rates compared to the previous year, although the hotel industry's profitability fell more sharply due to the slump in demand. In the peak season months of July and August as well as in September, an average increase in price enforcement of a good 7% can be observed.

A look at the price implementation to date in the individual summer months also reveals a very different mood in the destinations of Tyrol, South Tyrol and Bavaria:

Development of average price - destinations:

Hotels in South Tyrol continue to offer the highest room rates of the entire summer season compared to other destinations. August in particular shows the biggest difference, with 45% higher rates compared to Tyrol and 56% higher rates compared to Bavaria. Price enforcement in Bavaria was slightly higher than in Tyrol in May and June, while this ratio is reversed in July and August according to the forecast. In September, the average room rates of both destinations are at an identical level.

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Development of average rate - Tyrol:

The average room rates in Tyrol show the strongest year-on-year increase compared to the destinations of South Tyrol and Bavaria with an increase of 8%. The strongest growth in room rates was achieved in May, with an increase of 12% compared to the previous year. In June, room rates increased by 2.5%. For July and August, the forecast predicts an increase in room rates of 8.3%, while demand is expected to decline. A further increase of just under 9% is expected in September.

Development of average prices in South Tyrol:

A positive trend in price enforcement can also be observed in South Tyrol. Here, the average room rate increased by 6% compared to the previous year. In May, room rates increased by 6.2%, and in June, a 3.2% improvement in room rates was recorded. The forecast predicts an average increase in room rates of 6.8% year-on-year for the months of July to September.

Development of the average price in Bavaria:

In addition to the positive development in demand, the Bavarian vacation hotel industry has also shown an improvement in price implementation to date, with an increase of 5.7% compared to the previous year. Room rates rose by 9.5% in May and by 2.3% in June. The forecast also shows a positive trend: price implementation in the months of July to September is almost 7% above the previous year's level.

To summarize, the following interim conclusion can be drawn from the 2024 summer season to date.

1. Hotel operations in the Alpine region at the previous year's level with minimal growth:
   Public holidays and vacation periods led to higher occupancy in May, while unstable weather conditions and the absence of certain public holidays in June led to a decline. In July, a similar level to the previous year is expected, while the forecast for August and September predicts a slight increase.

2. Significant improvement in previous price enforcement throughout the Alpine region:
   The preliminary summer 2024 shows a significant improvement in price enforcement compared to the previous year, particularly around the May vacations and Whitsun break. In June, there was a slight increase in prices with a decline in occupancy. The forecast for the vacation months and the fall indicates a solid to good increase in room rates.

3. Regional differences in booking forecasts for the Alpine vacation hotel industry continue:
   In South Tyrol, the booking forecast for summer 2024 shows a stable development with a slightly positive trend compared to the previous year, although there was a decline in June. The forecasts for the vacation months and September are optimistic. The vacation hotel industry in Bavaria is also developing at the previous year's level, with rising occupancy rates in May and a forecast for further growth in the coming months, despite a slight decline in June. In Tyrol, on the other hand, demand is stagnating, with significantly lower occupancy rates compared to South Tyrol and Bavaria, and further challenges in the summer months. Autumn shows a stable occupancy rate compared to the previous year.
    

4. There are also significant differences in room rates in the destinations:
   Hotels in South Tyrol offer the highest room rates in summer, especially in August. Bavaria showed slightly higher room rates than Tyrol in May and June, while the trend is reversed for July and August. In September, the rates of both destinations are at the same level.
   
   

Tyrol has so far recorded the strongest increase in room rates compared to the previous year, with significant growth in May and a moderate increase in June, and expects further increases in the summer despite a slight decline in demand. Rates in South Tyrol also rose continuously from May to September. In addition to rising demand, the Bavarian vacation hotel industry showed improved price enforcement, with significant increases in May and positive forecasts for the summer.




Hotel expert Thomas Steiner, Managing Partner at Kohl > Partner, draws the following conclusion: "Booking forecasts in the Alpine region are stagnating at the previous year's level. Although the current price enforcement is showing positive signs, it is necessary in view of the cost structure. Low demand pressure, volatile guest bookings and the enforcement of room rates remain the current challenges in the individual destinations in the Alpine region."

Matthias Trenkwalder, Managing Director of RateBoard, says: "At the halfway point of summer 2024, the vacation hotel industry in Tyrol, South Tyrol and Bavaria presents a mixed picture. Nevertheless, room rate forecasts have risen by an average of 6.3% compared to the previous year, which is encouraging. It is now crucial to maintain prices and not dilute them with discounts."



For further information on the Summer 2024 fact check, please contact Thomas Steiner, Managing Partner of Kohl > Partner and Matthias Trenkwalder, Managing Director of RateBoard.