Hospitality Leaders' Summit Highlights Europe's Huge Growth Potential (IH&RA)

The Summit brought together more than 40 CEOs of the major lodging groups, between them representing over three million hotel rooms. This unique event was convened by the International Hotel & Restaurant Association (IH&RA), the World Travel & Tourism Council (WTTC) and the International Hospitality Investment Forum (IHIF). Discussions and debates, chaired by Sir Ian Prosser, Chairman of both Six Continents and WTTC, centred on the current and future prospects of the industry, security measures being taken post-11 September, and the need for recognition of tourism as a driver of economic growth in Europe.

"It is clear from our discussions today that, despite the events of the last few months, the industry's outlook for the future is extremely positive," said Sir Ian.

According to Jean-Claude Baumgarten, president of WTTC, the terrorist attacks of 11 September and underlying recession will result in a decline of 7.4 per cent in total travel and tourism demand in 2001-02, and will cost the industry over 10 million jobs worldwide. But WTTC forecasts are bullish for the longer term.

In 2003 travel and tourism demand is projected to rebound sharply, with the result that, by first quarter 2004, the industry should have fully recovered from the impact of 11 September, growing by 6.5 per cent. Looking further ahead, travel and tourism demand is expected to grow by an average of 4.5 per cent a year between 2002 and 2012.

Paul Slattery, Director Dresdner Kleinwort Wasserstein, shared this optimism. He set the scene with forecasts showing that in Europe, even with a modest 1 per cent compound annual growth rate, almost half a million new hotel rooms would be needed to satisfy consumer demand over the next ten years. On these assumptions additional capital investment of some ¤4 billion would be required. However, this could only be achieved if the structure of the European hotel industry and access to capital were radically overhauled.

At the same time it is important not to forget the hard-learnt lessons of 11 September. According to Eric Pfeffer, President of IH&RA, safety and security had already been identified as one of the major forces driving change in the hospitality industry. The tragic events of 11 September dramatically heightened awareness of this key issue. Participants acknowledged that security measures were vital and that hotel companies had to remain vigilant and attentive in the current environment.

At the same time, governments who systematically tend to underestimate the role of travel and tourism, had been made dramatically aware of the industry's importance through the losses incurred over the past six months.

"The time is now ripe for the industry as a whole to raise its profile both at the European and international level," said Pfeffer, highlighting the role of the IH&RA in ensuring this representation.

While it is difficult for a horizontal industry such as travel and tourism to speak with one voice, James Provan, Vice President of the European Parliament, said it was essential for all industry partners to pull together to achieve this objective.

For many participants it came as some surprise to learn that an industry accounting for 20 million jobs and 12 per cent of European Union GDP not only lacks representation commensurate with its economic importance, but also the means to influence industry-relevant policy matters.

Organisers of the Leaders' Summit look forward to continuing this type of dialogue - initiated by IH&RA in London in November 2000 - as one of the many ways of raising the industry's profile.