China Sentiment Remains Flat, But Optimism Begins to Grow in the USA

The latest survey compiled by Horwath Hotel, Tourism and Leisure (HTL), the world's largest hospitality consulting firm, has shown that most hotel operators around the world expect 2013 hotel performance to be in line with last year and for growth to be flat. Considering the last sentiment survey showed a majority of slightly negative responses, this is a positive move none the less, albeit slightly.

Sentiment in China remains flat, with hoteliers concerned that the huge influx of new first class hotel bedrooms into the country will make it difficult for them to increase rates and occupancies. Concern over new hotel bedrooms was the number one concern for hoteliers in the region, followed by global oil prices. Europe as well remains firmly sceptical of any meaningful improvement over the coming year, even though they do not have any significant additions in hotel supply. The continuing Euro crisis is causing deep concern and removing any thoughts of recovery. With Europe only five years in a de-leveraging cycle, hoteliers are worried about local economic and stock market trends as well as oil prices and exchange rate fluctuation.

The one bright are is the Americas, which recorded positive scores across all categories for the first time since the global financial crisis began in 2008. Hoteliers think that they will see improvements in average room rates, occupancy levels and revenue growth in 2013, something that reflects the RevPAR growth numbers that have been predicted for the year. In complete contrast to China, the USA has had basically zero supply growth for the last two years, so any increase in demand goes straight to the existing hotel supply without having to worry displacement.

The Survey, which can be downloaded in full at , provides the hotel industry with a quick assessment of the future market outlook. The four-question survey focuses on the outlook for occupancy, average room rates and total revenue. Hoteliers have also been asked to make comments on their expectations for the coming year in comparison to 2011, as well as identify key factors of growth/decline, assessing the outlook for key demand segments.

Damien Little, a Director of Horwath HTL in Asia and the founder of the survey said, "It is clear that some areas, Europe specifically are still under tremendous external economic pressures, pressures that show little sign of easing while the debt crisis resolves itself. Other major markets like Asia are not pessimistic, but are rightly concerned about the ability of the markets to absorb such a high number of new rooms. The general feeling is that they will be, but the question is how long. The one bright area is the USA when things seem to be moving and we are seeing a level of confidence about the future that has not been evident for some time. If RevPAR numbers continue to be strong, this might mean the start of a genuine recovery"

About Horwath HTL
Horwath HTL (Hotels Tourism and Leisure) is one of the world's pre-eminent consulting specialists in the hotel, tourism and leisure industries, providing unequalled experience and expertise for client projects around the world through a combination of detailed local knowledge and international understanding. Horwath HTL is currently the world's largest consulting organisation specialised in hospitality, with 50 offices in 39 countries.

Horwath HTL is a member of Crowe Horwath International, a professional association of accounting and management consulting firms founded in New York in 1915. Crowe Horwath International is currently ranked among the top ten international professional service groups with offices in close to 586 cities in 108 countries.

If you have any questions, please contact James Chappell, Global Marketing Director at [email protected] or Damien Little, Director of Horwath HTL China on [email protected]

James Chappell (HTL)
Global Marketing Director
Horwath