According to Jones Lang LaSalle Hotels’ recently released Hotel Investor Sentiment Survey (HISS), the majority of hotel investors signalled their intention to hold assets over the next six months, against a backdrop of uncertainty. With only a limited number of transactions occurring in Australia throughout 2008, it has also become increasingly difficult to call exactly what level pricing has reached.
The U.S. hotel industry posted declines in three key performance measurements during the week of 30 November through 06 December, according to data from STR. In year-over-year measurements, the industry’s occupancy fell 9.8 percent to 50.2 percent (55.7 percent in 2007). Average daily rate saw a 3.2-percent drop to US$103.46 (US$106.92 in 2007). Revenue per available room for the week decreased 12.7 percent to US$51.93 (US$59.51 in 2007).
Universal Investment Group (UIG), of Ukraine, is to spend a reported €100 million on the development of 25 Etap hotels in its home country by 2012. The budget hotels, which will share a total of 2,800 rooms, will be managed by a joint venture created by UIG and Accor. Reports suggest that some of the hotels will be built alongside petrol stations owned by UIG. All of the main cities in Ukraine are destined to join in the feast, with the capital Kiev, Lvov, Kharkov and Odessa set to be the four earliest beneficiaries.
The U.S. hotel industry posted large year-over-year drop-offs in each of the three key performance measurements during the week of 23-29 November, according to data from STR. The year-over-year decreases are in large part because of the date of Thanksgiving, which fell on 22 November 2007. This year, the holiday fell on 27 November, and historically, the Thanksgiving week is a slow week for the U.S. hotel industry. In year-over-year measurements, the industry’s occupancy fell 22.6 percent to 41.5 percent (53.6 percent in 2007). Average daily rate dropped 12.2 percent to finish the week at US$90.84 (US$103.51 in 2007). Revenue per available room for the week decreased 32.0 percent to end the week at US$37.70 (US$55.48 in 2007).
Jones Lang LaSalle Hotels reports that an increasing number of hotel investors are turning to Latin America for counter-cyclical investment opportunities. Hotel companies are researching market entrance strategies, conducting acquisition and new development due diligence, and analyzing future hotel demand in the 2014 FIFA Soccer World Cup candidate cities in Brazil.
This market briefing paper looks further afield to places such as Russia, Latin America and Eastern Europe. Hospitality and leisure companies should not lose sight of a trend that is present in many emerging markets: the rise of the urban middle class consumer. As disposable income increases so does consumer spending as well as tourism. Our report examines the opportunities for hotels, theme parks and leisure shoppers.
Every day we hear—and the data confirm—how the current economic environment is taking a toll on the U.S. hotel industry. Supply is outpacing demand, resort destinations are struggling, luxury chain scales are reporting negative revenue-per-available-room growth, and the list goes on. What has all of this U.S. economic turmoil meant for our friends to the north? In analyzing the data, we have discovered that, essentially, Canadian hotels are performing much like U.S. hotels.
The Berlin hotel market put in a punchy performance in October, according to the latest European HotStats survey of 10 European cities by TRI Hospitality Consulting. Daily profit per available room – as expressed by income before fixed charges (IBFC) – increased by 8 per cent to €95.08, making Berlin the third most profitable city in the survey. Berlin’s profitability was driven by rate growth, in large part thanks to the WBC World Heavyweight Championship at the O2 Arena. The unique boxing fixture attracted thousands of fans and VIPs, contributing to a 7.6 per cent rise in average room rate to €167.63. “
InterContinental Hotels Group (IHG) took its first trip to the emirate of Fujairah, in the UAE, this week to sign an agreement with Abu Dhabi real estate developers Seba Properties for the InterContinental Fujairah Resort. The 291-room beachfront resort is expected to open by the end of 2010 on the emirate's east coast, and as well as being IHG’s first property in Fujairah it will be the first InterContinental beach resort in the UAE. IHG currently operates 23 properties across the UAE under its various brands.
Hotels across the UK mostly experienced a slow October in terms of both occupancy and rooms yield, according to preliminary monthly figures released today by PKF Hotel Consultancy Services. Room rate increased in some cities and both Liverpool and Leeds bucked the downward trend. In the capital, room rate rose 0.1% on last year to £147.45, but the slowdown in business travel meant occupancy saw a 3.2% decline from 86.5% to 83.8%. Overall, this meant rooms yield was down 3.1% from £127.58 last year to £123.61 this year.
The UK chain hotel market reported a 9 per cent fall in profit this October, according to the latest HotStats survey from TRI Hospitality Consulting. The amount of profit generated per available room – expressed as income before fixed charges (IBFC) – fell to a daily figure of £49.76 compared to £54.70 the same month a year earlier. Lower profit was primarily the result of higher costs and a shrinking pool of demand. The sample of 509 UK branded hotels reported a 3.2 percentage point drop in average occupancy to 77.4 per cent. “For most UK hoteliers the effects of the economic downturn were clearly felt in October. With fewer guests and higher operational costs, pressure on profitability was inevitable,” said Jonathan Langston, managing director, TRI Hospitality Consulting.
The U.S. hotel industry posted large year-over-year increases in all three key performance measurements during the week of 16-22 November 2008, according to data from STR. The year-over-year increases are in large part because of the date of Thanksgiving, which fell on 22 November 2007. This year, the holiday falls on 27 November. During the week ending 22 November 2008, year-over-year measurements included a 29.9-percent increase in revenue per available room. RevPAR ended the week at US$56.29 (US$43.35 in 2007). Average daily rate jumped 10.5 percent to finish the week at US$103.55 (S$93.68 in 2007). Nationwide occupancy climbed 17.5 percent to end the period at 54.4 percent (46.3 percent in 2007).
The global hotel industry’s four regions reported mixed year-over-year results when reported in U.S. dollars, euros and British pounds for October 2008, according to data compiled from STR Global. Figures for occupancy, average daily rate and revenue per available room range from double-digit losses to double-digit gains, depending on the market and the currency used for comparison. “The worsening economic conditions started by the banking crisis that has affected economies across the globe have resulted in RevPAR declines in more and more regions”, said James Chappell, managing director of STR Global. “In U.S.-dollar terms, South America and the Middle East are the only two regions which reported RevPAR growth for October 2008 compared with October 2007. Even Asia Pacific has started to decline this month as business in particular has started to tighten the belt at uncertain market conditions”
The U.S. hotel industry posted declines in all three key performance measurements during October, including the first year-over-year decline in average daily rate in more than five years, according to data from STR. In year-over-year measurements, the industry’s ADR in October fell 0.5 percent from October 2007 to close the month at US$107.60—down from US$108.19 in October 2007. The decline broke a streak of 63 consecutive months of positive year-over-year monthly ADR numbers—the last monthly ADR decline was a 0.8-percent drop in June 2003. The U.S. hotel industry’s year-over-year revenue per available room dropped 7.0 percent in October and finished the month at US$66.85—down from US$71.92 a year earlier. Occupancy also declined in October, falling 6.5 percent to 62.1 percent (from 66.5 percent in 2007).
The impact of the current global economic crisis has reached Asia Pacific and the tourism industry is starting to feel the pressure as growth starts to slow. New analysis by Deloitte, the business advisory firm, shows that although hotels have reported positive growth for the year-to-August 2008, with revenue per available room (revPAR) up 13.2%, on closer inspection, hoteliers have started to feel the strain over the last few months. Until May 2008, revPAR growth across Asia Pacific was reporting double-digit growth each month, with average room rates driving this. However, since then, revPAR growth has fallen back, with June and July reporting increases of 7.5% and 7.4% respectively. Although August bucked this trend, with revPAR posting double-digit growth once more, up 15.2%, this was no doubt impacted by the excellent results Beijing reported after hosting the Beijing 2008 Olympic and Paralympic Games.
The First Scandics To Enter Poland | You know them as the Holiday Inn Wrocław and the Holiday Inn Gdańsk. From 1 January 2009 you will know these hotels as the Scandic Wrocław and the Scandic Gdańsk. But temper your sadness at the double loss of the Holiday Inn name with gladness that the rechristened hotels will be Scandic Hotels’ first properties in Poland. Standing at the font alongside Scandic will be Invesco Real Estate, the owner of the two hotels. The hotel in Wrocław has 164 rooms and the one in Gdańsk 143 rooms.
Results from STR Global show a sharp drop in revenue per available room (RevPAR) for London and Regional UK from October through the beginning of November. The exception was Liverpool, which benefited from its European Capital of Culture 2008 status. The UK hotel market has been following the global trend of declining occupancies and growing rates for the first nine months of this year. Year-to-September still showed 3-percent RevPAR growth across the UK driven by 4-percent growth in room rates compared with the same time prior year.
Is there any capital in the current marketplace? What will it take to get financing? When will markets return to normal? These and other questions were laid out on the table for examination by two elite panels of hospitality and real estate finance industry experts who met this week in conjunction with the International Hotel / Motel & Restaurant Show in New York City. Cornell University’s School of Hotel Administration organized the high-level discussions, a Center for Hospitality Research Real Estate / Finance Roundtable held Nov. 10 at the offices of law firm Proskauer Rose LLP, and “Real Estate Capital: Where is the Money Coming From?”, the third installment in the Dean’s Leadership Series, which took place Nov. 11 at the New York Yacht Club.
The U.S. hotel industry suffered dramatic year-over-year drop-offs in each of the three key performance measurements during the week of 02-08 November, according to data from STR. In year-over-year measurements, the industry’s average daily rate for the week tumbled 3.5 percent to finish the week at US$105.80 (US$109.66 during the same week in 2007). Meanwhile, occupancy for the week dropped 14.2 percent to finish the week at 56.9 percent (66.4 percent in 2007), and revenue per available room plummeted 17.2 percent to finish the week at US$60.25 (US$72.76 in 2007).
Recent events involving the global economy have had a huge effect on the hospitality industry. The recession that started in the United States is beginning to spread across Europe, creating trouble for many hotels. Hotels in the Middle East seem to be holding steady—despite recent declines in occupancy throughout the area, they are, for the most part, still seeing slight increases in room rates. This is similar to the situation throughout the U.S., where, despite hints of a recession and falling levels of occupancy and demand, hotels have been able to keep average daily rate growing.