Authored by Liliana Ielacqua, HVS Consulting & Valuation Analyst. The article summarizes the characteristics of the Italian hospitality market and highlights its recent performance, while considering the current issues that need to addressed. A combination of 20 Regional Entities. This overview on the Italian tourism industry will highlight how this very characteristic of the Italian market could become an opportunity for hotel development.
The market performance of the French hotel industry remained gloomy in march. Paris and the French Riviera are the most severely hit. In the Regions (outside Paris & Riviera), the drop of activity was not so drastic. However occupancy rates remained low (below 55% in 3-star and 4-star categories). Still some regional metropolis did well (Lille, Strasbourg, Lyon, Rennes, Nantes and Nancy) and benefited from increased Room revenues.
To say the market has been extremely tough over the last few months would be a massive understatement. We can see the effects that the banking crisis is having, the wider implications of an economic slowdown in the UK and the knock on for our own industry. As clients you have been very supportive of us in the past, either when we were The Bench or HotelBenchmark and now as STR Global and we want to try and help as much as we can. We are sitting on a large amount of quality market information, and whereas you have the ability to pull a lot of data through our website, you probably haven’t had the time to. In all market conditions, whether growing or contracting, we need to look at the specific market segment because they all behave differently.
indicators show UK hotels, of all shapes and sizes are in for a rough ride over 2009, with nearly 200 per cent more hotel companies becoming insolvent in Q1 2009 than in the same quarter last year. Up to this point we have mainly seen smaller, standalone hotels, with only a few exceptions of hotel companies where debt levels have become unsustainable as demand and profits have declined. However, new PricewaterhouseCoopers LLP insolvency statistics show the quarter to quarter rate has slowed with a 20 per cent increase in insolvencies from Q4 2008 to Q1 2009 - the highest increase being over 100 per cent from September to December 2008.
Hotels across the UK experienced further falls across occupancy, room rate and rooms yield in March, according to monthly figures released today by PKF Hotel Consultancy Services. Direct year on year comparisons are hard to make when Easter falls in different months, which is the case between 2008 and 2009, but nonetheless the figures suggest that the economic downturn continued to affect the capital.
London profit down by 16 per cent in Q1 2009. The UK chain hotel industry experienced heavy falls in profit and revenue during the first quarter of 2009, according to the latest HotStats survey by TRI Hospitality Consulting. In London, daily profit - expressed as income before fixed charges (IBFC) – fell by 15.7 per cent to £45.62 per available room compared to the same three months a year earlier. Room revpar decreased by 10.1 per cent to £77.58 due to a 5.5 per cent drop in average room rate and occupancy down by 3.7 percentage points to 72.9 per cent.
STR Global and Fairmas, the two leading providers of market information to the German hotel industry, report on the performance figures for the German hotel market. A year-to-year comparison of data for February 2009 shows all indices down for the country as a whole--average daily rate fell 0.7 percent, occupancy change was -7.4 percent and RevPar change was -8.1 percent. The relatively modest fall in rate was bolstered by a significant rise in year-on-year ADR for Cologne of 16.8 percent and insignificant decreases for Hamburg, -0.6 percent, and Berlin, -1.6 percent.
London hoteliers are expected to see a 12.7% drop in revenue per available room (revPAR) by the end of 2009 according to Hotel Market Outlook, a quarterly report released by Deloitte. The report uses the outputs of an econometric model produced by an independent economic research group to produce forward looking changes in hotel performance.
London profit down by 17 per cent. The profitability of London chain hotels fell by 16.9 per cent in February, according to the latest HotStats survey by TRI Hospitality Consulting. London hotels generated daily profit – expressed as income before fixed charges (IBFC) – of £47.75 per available room compared to £57.46 the same month a year earlier. Total revenue and room revenue were down by 11.3 and 10.4 per cent respectively in London. Average room rate dropped by 6.6 per cent to £108.15 and occupancy was down 3.2 percentage points to 74.7 per cent.
Our revised hotel industry forecast for the UK illustrates the toll that the contraction in economic growth and consumer spending is having on travel demand. With the consumer boom over and businesses reining in costs and cutting travel budgets, the UK hotel sector is already experiencing a sharp slump in sales. The market is hard to read but operators now have to fight a lot harder to win business in a shrinking market and the decline in hotel performance looks set to accelerate through Q1 to Q4 2009. Our report gives the outlook for hotels in the UK, London and the provinces.
This paper presents the key highlights for the hotel property sector from PricewaterhouseCoopers' recent report, Emerging Trends in Real Estate Europe 2009. Although investment activity has slowed, respondents to PwC's Real Estate Survey suggest that the "price declines should lead to interesting investment opportunities in 2009/2010."
According to end-of-year results released by MKG Hospitality's database Hotel CompSet, the French hotel industry has secured positive growth in 2008, if ever so slightly, as it prepares to tackle this year's economic recession.
The Revenue per available room of French chain hotels shows in September 2008 a drop of 3.8%. This expected result is attributed to a remarkable September 2007. More particularly Paris suffered from the absence of the Rugby World Cup this year. On a national level, the global occupancy rate dropped by 3.4 points. Whereas, economic hotels are proving their ability to resist, the upscale category is more affected with a drop of its occupancy and average daily rates.