Welcome to the Pandox Q2 Presentation for 2024. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to Anders Berg. Please go ahead.
Thank you very much. Good morning, and welcome everyone to this presentation of Pandox Interim Report for the Second Quarter 2024. I'm here together with Liia Nõu, our CEO, and Anneli Lindblom, our CFO. And with us today, we also have Alex Robinson, director, industry partners, at STR. And STR is a leading independent research firm focused on the hotel market, and Alex is here to share STR's view on the market. The views expressed by STR are completely separate from Pandox, and the presentation is offered only as a service to Pandox stakeholders. And also, please note that Alex's presentation will be held after we have completed our formal earnings presentation, including the Q&A. Before we let Alex in, Liia and Anneli will present a business update with financial highlights for the second quarter 2024, followed by the Q&A session.
With that, I hand over to Liia Nõu, the CEO of Pandox.
Thank you, Anders, and good morning, and welcome everyone. I would like to start this presentation with a very quick recap of some key investment highlights on Pandox. We are active in travel and tourism, a global and highly dynamic industry with strong structural growth drivers. Travel and tourism is one of the largest industries in the world, accounting for almost 10% of global GDP and a substantial share of new jobs created. We only invest in hotel properties. We are the largest listed pure hotel property owner in Europe, with a unique portfolio of high-quality assets. We are an active owner with deep hotel expertise, and we work with all operational models and are focused on creating value across the whole value chain. We have revenue-based leases with strong skilled operators. This gives us upside and common goals with our operators.
It also gives us inflation protection, as the inflationary costs are borne by the operator, and it also enables Pandox to have a strong positive yield gap of more than 200 basis points, relatively independent of interest rate environment. We have a high-quality project pipeline, which we expect will accelerate our organic earnings and value growth in 2024 to 2026 and beyond. We have ambitious ESG targets, including a substantial climate transition program with high ROI. Our property portfolio has an average valuation yield of 6.26%, with long leases and a WAULT of 14.6 years. Finally, we have only bank financing with strong and positive lender relationships and low refinancing risk. Our business is to own, improve, and lease hotel properties to strong hotel operators under long-term revenue-based leases. We do this through four principal value activities.
It's property management, property development, portfolio optimization, and sustainability. We are an active and engaged owner based on deep hotel expertise. We have a strong and well-diversified hotel property portfolio, consisting of 157 hotel properties, with approximately 35,000 rooms in 11 countries and 90 cities, and with a property market value of SEK 71 billion, with an average yield of 6.26%. We are divided into two mutually supportive and reinforcing business segments. It's leases, and it's our own operations. In leases, where we own and lease out our hotel properties, it stands for 84% of our property market value. And in our own operations, we transform and run hotels in properties we own, and this makes up for some 16% of the property market value.
The focus of our portfolio is upper mid-market hotels, which, with mostly domestic demand, is the backbone of the hotel market, regardless of which phase in the hotel market cycle is in. We also have one of the strongest networks of brands and partners in the hotel property industry. This ensures efficient operations and revenue management, which maximize cash flow and property values and a continuous flow of business opportunities. A relatively large part of the investment in leases is shared with a tenant, which lowers our risk. We had a positive and seasonally strong hotel market in the second quarter. The event calendar was packed, leisure travel was active, and business demand was stable. This translated into good operational performance for us.
Like-for-like, both revenues and total net operating, net operating income increased by 6%, and cash earnings increased by more than 10%, and growth in EPRA NRV was positive. Our average outgoing interest on debt decreased to 4.1% in the second quarter, which further supported our positive yield spread, which is above 200 basis points. So our financial position is strong, and we are well-positioned to act on market opportunities. Here is the RevPAR development level for our business segment leases, compared with 2023. The numbers are on comparable basis and of fixed currency. In the second quarter, RevPAR increased by approximately 3% like-for-like, and for the portfolio as a whole, it increased average prices explains most of the uplift, and more of that on the next page.
Here we have a breakdown of the performance for a selection of countries, regions, and cities versus 2023. We show average daily rate on the vertical axis and occupancy on the horizontal axis. Thus, origo is the point corresponding to 2023 on both ADR and occupancy. In the boxes, we indicate how much higher or lower RevPAR is compared with the corresponding period, 2023. In the second quarter, the hotel market, with some variations, developed positively. RevPAR increased in most markets, driven by increased price, while occupancy was a little bit more dispersed. In terms of RevPAR, the greatest relative improvements took place in Norway regional and capital cities in the Nordics, such as Stockholm, Copenhagen, and Helsinki, which benefited from an active event calendar. The improvements in Helsinki was particularly welcome.
Alex Robinson from STR will talk more about the underlying trends in the European hotel market later in this call. We have an active investment pipeline and are on track to add an additional SEK 300 million in net operating profit by the year 2026 on an annualized basis. Hotel Pomander is already completed and in full swing. Citybox Brussels opens 14th of July, and Scandic Go Fridhemsplan opens 8th of October. These two will gradually start to contribute during the second half of this year. We are also adding new products to the pipeline continuously. Two examples are in hotels, The Hotel Brussels and Leonardo Hotel Dublin Christchurch. And with that, I hand over to Anneli Lindblom.
Thank you, Liia. So good morning, everyone. We are happy to report a profitable growth in the second quarter, which is a seasonally strong quarter, and this year filled with many events. We saw good performance in both business segments. For the group, like-for-like growth was positive, both in revenue with 6% and in net operating income with 6%, supported by a positive and active hotel market. Owned operations continued to perform well in the second quarter, supported by a strong hotel market in Brussels and a positive boost from European Championship in football, especially for our hotels in Berlin and in Dortmund. We also saw positive effects from the renovation of the repositioning of Hotel Berlin, that in Berlin. Like-for-like growth in revenue was 10%, and in net operating income, it was 20%.
Cash earnings increased by 10% in the quarter, and profit before change in value increased by 16%. Current tax amounted to SEK -104 million, and the effective tax rate was 7.4%. On this slide, we show the change in the main valuation parameters for the total property portfolio year to date. Remember that according to IFRS, unrealized changes in value for our operating properties are only reported for information purpose and is included in the EPRA NRV calculation. In the second quarter, 2024, the unrealized changes in value were a positive SEK 423 million. This is explained by increased cash flow, which outweighed a marginal increase in yields.
As you know, we have the main part of our hotels properties outside Sweden and them denominated in foreign currency, so we did have a positive effect of currency this quarter. In the quarter, we completed the divestment of our last hotel in Canada. End of period, the average valuation yield for investment properties was 6.13%, and for operating properties, it was 6.90%, and on average for the total portfolio, 6.26%. Here we have the average yield, the average interest on debt, and EPRA NRV per share quarterly. Despite higher yields and higher market interest rates, EPRA NRV per share has increased compared with 2019, and we have a tangible and positive yield spread of over 200 basis points.
In the second quarter, growth in EPRA NRV was positive, measured on an annual basis, adjusted for paid dividends. Our LTV at the end of the quarter amounted to 46.2%, which puts us in the lower end of our policy range. The ICR on a rolling twelve-month basis was resilient 2.6 times. Cash and credit facilities amounted to SEK 4.1 billion, and on top of that, we have still uncovered assets of some SEK 800 million as an untapped reserve. The financing climate has improved further in the last couple of months. In the quarter, we refinanced loans of SEK 3.5 billion, and generally, we can now refinance at lower credit margins together with a slightly lower base rate.
We continue to increase the share of sustainability-linked loans, and end of quarter, we have some SEK 5.4 billion that were sustainability-linked. Looking ahead, we have SEK 7.4 billion on debt maturing within one year, up with 60% in the fourth quarter. And as you know, we have strong relations with our banks, and discussions on future refinancing are ongoing and positive. At the moment, 71% of the net debt is hedged, which means that the effect for movement in the market rates are still relatively low. And with that, I will hand back to Liia for some more final remarks.
Thank you, Anneli. Our message from the last two interim reports that we expect some revenue growth in the hotel market in 2024 is still valid, and it's well supported by the developments in the first half year. We are currently in a seasonally strong leisure period, with high demand from domestic and regional leisure travel. The event calendar remains well-filled, and we see increased international inbound travel to Europe. For example, in May, London Heathrow reported its strongest 12-month period ever, and there's still good potential for increased passenger volumes during the summer. All in all, we remain positive and expect good hotel demand also for the third quarter. And we now move over to the Q&A. Operator, we are now ready for questions, and please do not forget to hand the call back to us afterwards for Alex's presentation.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Markus Henriksson, from ABG Sundal Collier. Please go ahead.
Thank you very much. Good morning, everyone. Two questions from me. First off, a bit regarding acquisitions. Could you highlight a bit what you're seeing in your different markets? In what type of markets are you seeing improved activity? And then a bit of reasoning on where you're comfortable in terms of net debt to EBITDA and loan to value. Thank you.
Yes. Hello, hi. When it comes to acquisition, we are happy to see that the transaction market is well back. A lot more transactions are possible than it was just a half a year ago or a year ago. And it's the same answer we always give, we want to—we are preferably looking at where we already are, but also neighboring markets. But the most liquid and the current market is U.K., Ireland, but of course, also the Nordics. Love to do something in Germany, but it's typically a little bit later on. So U.K., Ireland, may be the first one where you see the largest numbers of transactions, actually. On the second question regarding LTV, we are 46.2%.
This is in the lower range of our 45%-60%. And now when we see deals hopefully flattening out and improving, then we are comfortable by being around obviously in our range, but we have never been basically south of 50. Hopefully, with some acquisitions, we can improve or increase a little bit from the 46, but I would expect us to be in the range between where we are today and up to 50 plus.
Thank you. Very clear. Then a bit on new hotel supply. If you could go through a little bit in your different markets, where are you seeing the most kind of favorable demand-supply situation relative to the current performance in respective markets?
Yeah.
And then, relative to, say, one to two years from now, where you're seeing a potential that the trend could last or change? Thank you.
Yeah. Well, what we have—like we said before, what was already planned before the pandemic has been put in place. And where we have seen a lot of new demand or new capacity coming in is especially Copenhagen, it's Helsinki, it's Gothenburg, which is in this year has been a lot new capacity coming in. Not so much are coming sort of newly planned, so we expect end of 2024, 2025, 2026, to have a very moderate increase of new capacity. But of course, as always, this will eventually be coming back. But otherwise, these are the, these are where we're seeing the most largest capacity. Then there's of course specific cities, et cetera, but Copenhagen, Helsinki, Copenhagen, Gothenburg.
Thank you. And then could you please remind us when we see this kind of strong performance, if you go back historically, how quick has the market been able to see that and new supply coming onto the market, say, from a plan and then?
Yeah
construction and then entering the market?
Yeah. When it, I can explain sort of twofold on the question. When a new capacity comes in, it typically takes maybe up to 1.5-2 years before it's actually sort of absorbed in the market. Then again, of course, when new capacity comes in, the planning phase for a new hotel would normally take anything between 2-4 years. So you would expect something to start coming in, but it's a quite long process of actually putting a hotel in place to build it and then also establish a new market for it. So we do expect there is a window where there's much less capacity coming in now, especially in end 2024, 2025, and beginning of 2026.
Very clear. Thank you.
Thank you.
The next question comes from Fredric Cyon from Carnegie. Please go ahead.
How much do you think is additional revenue associated with the European Championships in Germany in the second quarter?
We lost, we lost you from the beginning. Maybe you can sort of restate your question, Fredric.
Of course. Can you hear me now?
Yes.
Yeah.
Perfect. So, obviously, the European Championship had a positive effect on the German operations in the second quarter. Can you elaborate on what kind of additional revenue that generated in the second quarter for Pandox?
Absolutely. Absolutely. When we look at the—we try to estimate what the effect of the European Championship has been in June and also July. If you look at June month separately, the German markets, RevPAR, increased with 19%, and we expect approximately 70%-75% of that coming from the European Championship because there was also more events and conferences in, in, in that month. So there's like a, not a double dip, but a double hill, or whatever we say it. So that means that the effect on the quarter, we estimate to be somewhere between 5%-6%, and on a yearly basis, it's 2%-3%, which is quite remarkable, I would say.
Of course, individual cities, there could be anything from 25%-80% increase, and we are happy to, as you know, we have hotels in both Berlin and Dortmund, which have been the sort of biggest cities where a lot of matches have been. In July, we do expect that, of course, there will be a continued effect, but as there have been fewer matches, we perhaps estimate that this will be half the effect of what we saw in June. Month to date, we have approximately, for the two weeks, about 15% increase in revenue in the German market. So very positive, all in all.
Definitely. Thanks a lot. Moving over to RevPAR guidance, you've said, obviously, that there will be some growth in 2024. I believe you have a good knowledge of the event calendar next year. Do you think it's reasonable to assume that we will have RevPAR growth despite all the favorable moments we've had in 2024?
Yes, I do believe so. We also will have some RevPAR growth, absolutely. I mean, with the event calendar being full this year, of course, there are a lot of events also in next year. So we have a remarkably strong Q2. It will be maybe perhaps difficult to beat the Q2 next year in a significant amount, but there will be RevPAR growth. And add to that, there's less capacity coming in. Also, we have our projects coming to market. So all in all, market growing, and that's why our project is coming in.
Sorry,
now you're breaking up again.
Yeah, sorry, we don't, we didn't catch that.
Okay, sorry. Can you hear me now?
Yes.
Yes.
Okay, perfect. So moving on with the cost of debt, the declines somewhat, quarter on quarter, and you do have a quite a lot of debt maturing within a year. Do you think your cost of debt has peaked?
Sorry, that our cost debt has peaked?
Uh, peaked.
Well, yes, and as we write in the report and as we're seeing, and the credit margins are coming down in all the refinancing. And also, of course, we take the opportunity to re-refinance where it's possible. So the credit margins are both from our old pandemic times, but also sort of in a different, more worrying environment. So, I do believe we are. As, of course, we have more than 70% which is ahead, so it will take a little bit more time, but we are refinancing continuously, so, and it definitely will come down.
Then my final question relates to acquisitions. There has been quite a few deals in the European hotel market year to date. Has the price level been too elevated for your taste, or is it more related to what kind of assets and portfolios has been out there?
It's, as always, we are looking more and at different both single assets and small portfolios than ever. Typically, these portfolios so and as it take a little bit time to put in place. There are quite a few interesting things out there, but there's also, of course, a big chunk which also hasn't been moved or turnover for a long time. So there's a lot of especially fixed leases, which we not really our cup of tea. But there are definitely interesting things out there, both price-wise and market-wise.
Thank you, and sorry for the bad line from central Stockholm.
So close.
The next question comes from Albin Sandberg from Kepler. Please go ahead.
Yes, hi there. Couple of questions, please. If we take, I think you said, Liia, that you're basically repeating the hotel market outlook for this year.
Yeah.
Just looking at Q2 isolated, how did that play out versus your expectations, when you ended Q1?
Well, it we were not at least disappointed, if I may say so. Ahead of plan, slightly better, I would assume, because you never know, of course, and of course, there's always worrying about everything from inflation, interest rates, recessions, and God knows what. But very, very, very positive sort of report from Germany. And Germany, as such, in April-June was pretty flat, but in June jumped up, and we are now sort of on plan or even better. And U.K., Ireland, fantastic, all going along, just ticking good.
And if one were to compare, you know, the market RevPAR numbers that's provided in the report with Pandox's own sort of RevPAR, is your feel that you are outperforming the market or in line with the market or maybe even underperforming the market?
When it comes to prices?
Yeah, I would say RevPAR in general.
Well, so far, a lot of the RevPAR growth, I mean, sort of most extreme upside has been the south of Europe, and as you know, we don't have so much presence in the Europe. But you could say that we have more potential as Germany is coming in. I mean, they had a strong performance in Belgium, et cetera, this quarter. But we are in, by country by country, I think we are in line with the performance. On a total Europe level, then, of course, we don't have the presence in the south of Europe, and especially Italy, Spain, Portugal has been heading the pack.
Yeah, yeah. Well, that's clear. I was thinking more on the markets where you're actually present. So, I take it
Oh, absolutely.
You believe you are absolutely in line with the market.
Yeah.
Yeah.
Yes, absolutely.
Okay, good. And, on your ongoing developments, where you indicate SEK 300 million of NOI increase, and I guess two of them are completed, how much of those SEK 300 million are already in the numbers by Q2?
Well, basically nothing yet. I mean, we have Pomander, which come into play in the, I think it was first of March. Scandic, Citybox, et cetera, they will come in in the second half. So basically, there is very little yet which have come in.
Okay, great. And then, of course, I understand, you know, the, especially the stock market is changing quite rapidly direction. And just thinking about your commenting about the refinancing and so on, and of course, there's been a lot of focus on that. And then we have seen, I guess, a very supportive start to the overall refinancing opportunities, not only for you, but for your peers. But you still spend some time, you know, commenting on that. And I guess, being a property company with a lot of debt, it's not unusual in that sense. But I guess when we look at the upcoming refinancing now over, you know, this year and maybe next, you indicated that you're expecting a positive outcome of that, not a negative, I guess.
Absolutely.
But do you think that this kind of when do we get into some kind of a steady state on the refinancing, or are we still in a special stage, or are you in a stage where you sort of, I don't know, maybe adjust your debt portfolio for a longer credit maturity or anything like that? I guess we will always have this comment when you report going forward, or is it still something special you want to highlight to us?
I think we are well, as we are sort of refinancing our portfolio, we indicated in the last call that new refinancings are around 40 basis points lower. If anything, I think maybe the lowering of the credit margins are even higher than that. So pre-pandemic, the average margin was around 150 or so, maybe it peaked about mid-230 to 240. Now we are heading back, hopefully below 2% again. So whether we'll go back to 150 for the whole portfolio, and that will probably take a little bit longer time, but I'm sure we'll actually get there as well.
Yeah. Okay. Okay, thank you very much. That's all for me.
Thank you.
The next question comes from Eduardo Gill-Skipwith from Green Street. Please go ahead.
Hello, good morning.
Good morning.
One question from me. In terms of, so sounds like you're gonna be a grower, so either acquisitions or more development. I'm keen to know what sort of yield on costs you'd be targeting for sort of new developments, either new ground up developments or value add type opportunities.
Well, we only do value add. We don't do sort of newly built, so the acquisition. Either we develop in our own existing portfolio, or we acquire properties where there is possibility to continue to do some development and value creation. Which would be in line with what we have seen before, and with our average yield on.
Could you elaborate on, on the average that you've seen before?
When it comes to our own investments, I mean on in our existing portfolio, typically, we would have a return around maybe 10%-15% or 12%-15%, depending on what kind of development it is. When it comes to acquisitions, then, of course, it depends on which country we would do that in. But hopefully we find some I mean, the last acquisitions we did for 9%-10%, of course, I would do hundreds of those if I was able to do, as interest is coming down. But typically, we do find ways of getting very healthy returns as we buy something, and then we do continue the investments and develop the properties, adding even more value.
Understood. Maybe another quick one. Are you looking at also other geographies that you haven't invested in? I'm thinking, you know, Southern Europe has been pretty active in terms of acquisitions and deals. Is that an area you could expand in the future as well?
Well, we would typically do where we already are, and of course, neighboring countries as well. I mean, there's a lot of opportunities already where we are. There's large, huge markets. We've been looking at Spain, we've been looking at some different markets as well. It's typically sometimes been too expensive or been a little bit too late in there, but we would never say never. But there is more than enough to do as well, also in the regions where we are, especially U.K., Ireland, Nordics, Germany, Benelux, et cetera.
Perfect. Thank you.
Thank you.
There are no more questions at this time, so I hand the conference back to the speakers for the next part of the presentation.
Yes, thank you for all the questions. And now we would like to hand over to our guest speaker, Alex Robinson, for the hotel market update. And a reminder once again, that Alex's presentation is totally separate and independent from Pandox, and it is arranged as a service to Pandox stakeholders. With that, please, go ahead, Alex.
Good morning, everyone. Thank you for the welcome. If we commence with our first slide, what we can see is global demand for hotels, number of rooms sold. And the good news is, since Thomas last presented to you on the April call, is that trend of selling more rooms as a global industry is continuing now in effect for the last 17 months. If we then go to the next slide, please, what we can see is there has indeed been a slowdown in terms of percentage year-on-year change for demand. Notably, we saw contractions in February and March. So positive news, we've seen gains back in April and May. And a big driver of that, which we'll see if you head to the next slide, please, is the U.S., which did have declines towards the end of last year, start of this year.
But as we can see in both April and May, albeit with muted supply growth of less than 1%, demand easily outstripped that, generating overall growth. On to the next slide, please. What we can see is a picture of global occupancies, and much like Thomas presented in April, mixed picture, if you take into account the likes of Mainland China, Northern Africa, South America, where we do see declines. And if we look at Europe, we do see commendable growth year to date of 2% through until May, full occupancy of 66%. Still slightly off the occupancies of 2019. But what I think is important to remember here, is that since January of 2020, we had almost as many as 3,000 hotels approaching 320,000 new rooms open across Europe.
So even while the industry did stand still for a period during those lockdowns, constructions did move forward, and we are indeed selling into a bigger pool of rooms, which I think makes the recovery and growth that we've seen a result even more impressive. On to the next slide, we'll start to take a look at occupancy, average daily rate, and revenue per available room percentage change for Europe. Again, we can see February and March, particularly in April, with a shift in Easter, slower gains, but then back in May with more commendable growth of 6%.
Overall, while it may appear to be a deceleration, I think it's important to contextualize that those large double-digit percentage growth that we saw during the recovery period are now making way for a more single-digit range of growth that we would have expected pre-pandemic and would have been present in normal market trading. On to the next slide, and what we can see is that it's a positive picture of growth as far as occupancy on the books. When we last provided an update in April, we could see that weekend business was about even with where it stood last year. More good news that we can see as of July first, when this data was captured, that actually weekend stays are ahead.
One of the big questions that we get from investors on many calls, presentations, is, "Can this European summer be as good as it was last?" The initial data is very positive. One theme that we've been keen to highlight this year, which you can see again in the middle portion of the slide for weekday, is that weekday occupancy on the books is also ahead and is fostering growth, which you see on the next slide, please. What we'll then see is ADR by stay pattern. You've got your shoulder stay, Sunday to Thursday, for the glass of wine. Midweek, the laptop representing a more corporate stay pattern, and then your golf bag for your leisure. If we look at 2022 briefly, no surprise, we all know that leisure led us out in the early stages of recovery. 2023, that gap closed.
We started to see midweek and shoulder stays get back and be on the map. And now into 2024, you can see that gap closing. And what's interesting is if you look at many cities, particularly across Europe, it is actually that midweek stay pattern, both in occupancy and rate, that's driving that growth. To the next slide, please. What we'll then see is a comparison between European revenue per available room and U.S. per available room indexed to 2019. And we talk about the importance of that summer, that packed events calendar, the Euros taking place in Germany, the Olympics upcoming in Paris.
You can see there in 2023, that was the inflection point for when European performance surged ahead, and you now cast your eye to the end of the axis in May, and you can see that it is taking into effect again. And that's also bolstered by, you can see the small graph there to the bottom right. Within there, 1 percentage point more occupancy than we did have same time last year in July and August, and also for September and October. So it does make for a very positive reading in general. So the next slide, please. What we see is talking about that regional picture, and you touched on this in some of the questions and commentary earlier. U.K. and Ireland fully recovered relative to 2019.
Again, I think very impressive when you consider all new, new rooms, but also enter that market in the meantime. Southern Europe also performing well, and good news also for CEE and the Nordic countries, where, yes, they are towards the end of the spectrum, but if you look at the very bottom there for year-over-year percentage change, you can see making gains. So not standing still, but actually pushing ahead to close that gap. So the next slide, please. What we'll see is rate, and this is really when, as one of the questions answered earlier around the performance in the Mediterranean, you talk about Italy and France and Spain, which have had really strong performance in the convergence of international travel, strong luxury offering, and all catered towards leisure.
Notwithstanding the rest of Europe, while not perhaps seeing those same levels of rate growth that we're seeing across the Mediterranean, also strong levels relative to 2019. If you cast your eye to the bottom again, in year-over-year percentage change, you can see still growing even on top of that already impressive growth. The next slide, please. Now we pan out for a bird's-eye view of RevPAR in key cities across Europe. It's not quite as bright viewing as Thomas shared with you in April. It is a slight bit of softening in terms of occupancy growth, and you do start to see some of those markets. Dublin, for example, where supply growth is outstripping that of demand, starting to slow somewhat. Paris, you also see, which we'll touch on in more detail, a bit of displacement in the lead up to the Olympics.
But overall, very small declines, if any, and not quite the same level of growth, but still growth overall. And to the next slide, please. When you look at the year-to-date figures for average daily rate, you can see those contractions in Dublin again, which we highlighted, where supply is outstripping that of demand. If you cast your eye to Warsaw, for example, you'll be able to see that that market's had record years, year after year, and does have more supply coming into it, so ADR growth, more muted there. And then to the Baltic States, where you do have some demand challenges or in the likes of Vilnius, comping over an active event calendar last year. So looking south across the Mediterranean, you can see those encouraging figures of rate growth overall.
On to the next slide, and now having a cross-section of performance by class, luxury, all the way through to economy. Again, we see that all classes are ahead of 2019, but we're still seeing the continuation of a theme, which indeed is a global theme, not just a European one, where our luxury hotels at one bookend, economy hotels at the other, are the strongest in terms of performance and mid-scale, slightly less in terms of gains versus 2019. On the next slide, we'd say, what could we infer overall versus business on the book? As of July 1, for each respective hotel class from July until September, what level of business on the books do we have versus the same period of 2023?
You can see again, it is economy and luxury hotels with a large number of business on the books relative to the same period, but good news also for all classes, that while they may not be performing at the same level, they do indeed have more positive occupancy on the books than they did versus last year. On to the next slide, and this is one I thought to include, and Thomas did include again in April. But I think really important to highlight here what we're seeing in terms of occupancy week-over-week in 2023 versus 2017, highlighting no change in the data. There is no AI applied. We didn't add any intelligence to that. It's simply those occupancy, week-over-week, percentage points, difference, overlap, and you can learn a great deal from the past, and that we're very much perhaps creatures of habit.
And proof being, if we go to the next slide, what we can see for the first half of 2024, albeit April and May, slightly less of a correlation due to the shift in Easter. But again, following those same week-over-week occupancy gains or declines relative overall. So we can learn a great deal of performance when looking at the past and taking that forward into the future. And on to the next slide, please, and I think apt to cover Germany, as Thomas did in April, but also in light of the large events calendar, not just that of Euros, but many other Weltmesse and large stage concerts. You can see occupancy there pushing closer and closer to 2019, April and May.
Bit of a gap, but now as we head into all of the fixtures for the Euros and events throughout the summer, you can see June and July pushing ever so close. To the next slide, please. You can really see the impact of the football there. That first weekend of fixtures through into July, really steaming ahead in terms of rate and starting to push onwards. On to the following slide, what we'll see, and I thought it's an interesting one to highlight. So here we have Paris as of the beginning of July. No surprise there.
Huge amount of compression over the dates during the Olympics, but also what's interesting, and this is a trend that we saw in London, also in Rio and Beijing, other Olympic host cities, where as rates increase and as crowds increase, there is indeed a bit of displacement in the lead up to, and the period following, where those who may have gone to Paris, whether they're put off by the rates or indeed the larger crowds, you don't quite see the same occupancy in those periods. However, it is still great news for host city hoteliers, where rate growth during that period is so substantial, you'll expect to see very significant RevPAR growth over that period, and Paris looks to be no exception. On to the next slide, and touching briefly on our European forecast there.
One caveat that we do not forecast for Europe on a continental level, but a concentration of the cities you can see highlighted below there. Almost equal parts, occupancy and rate, pushing RevPAR growth this year, if not more on the rate side, which not surprising when you can see the compression caused by many major events and the rates that hoteliers are able to achieve over that period. However, into 25 and 26, our analysts saying that rate growth, while it's been so great over recent years, tempering somewhat and occupancy taking over as the driver of growth for those subsequent years. Our next and final slide, just a big thank you for hosting us this morning. It's been a pleasure to join the group and provide some insight across Europe.
Wishing you a great weekend and some summer holidays if you do have any coming up.
Thank you, Alex, for this hotel market update, and thank you all for participating in this call. We really appreciate your time and interest in Pandox. Save the date for our interim report for Q3, which is published on October 25. We wish you all a very nice and relaxing summer, and do not forget to stay at our hotels. Goodbye.