Newsletter - July 19, 2002
Germany Annual Review 2002
Momentum
keeps hotel performance strong
HotelBenchmark.com
- Hotel performance in
Germany's major cities improved steadily in the late 1990's to what was
generally described as a ‘boom’ in 2000. Leading hotels in many major
cities achieved occupancy rates near or above seventy percent, along with
healthy increases in average rate. In 2001, occupancy fell as a result of the
economic slowdown, compounded late in the year by the events of September 11.
However, the momentum of the previous year was sustained on the rate side,
with room rates increasing in 16 of the 22 cities surveyed. On balance, revPAR
remained little changed from 2000, but slipping occupancy raises concerns over
whether rate increases can continue.
Occupancy fell
and room rates rose at hotels in all price categories and all location types.
Hotels in primary cities, at airport locations, and the most expensive hotels
recorded the greatest drops in occupancy and also achieved the highest rate
gains. This apparent contradiction is explained by very strong rate gains in
several of the largest markets and by the particular dynamics of the German
hotel business:
• Most major
city markets in Germany rely mainly on business travellers, including a high
proportion of locally negotiated corporate rates. Rates achieved in 2001
reflect negotiations conducted in 2000.
• Despite a
drop, occupancies in such major cities as Frankfurt and München remained near
or above seventy percent, an important benchmark that reflects sellout or
near-sellout occupancy on weekdays, which in turn supports strong rate
increases.
•
Independent of general market trends, the biggest trade fairs lead to
short-term supply shortages that enable hoteliers to demand premium rates from
all clients, even often overriding negotiated corporate rates. A look at
winners and losers among major city markets illustrates the impact of special
events and the importance in Germany of the trade fair and convention
business.
• For the
third year running, the city of München and the München airport market were
among the biggest winners, posting revPAR gains of 6.7 percent and four
percent respectively in 2001. City hotels continued to benefit from the
success of thenew trade fair and convention facilities at Riem, and from a
lack of new upscale hotel development in the 1990s. München airport –
derided as a white elephant when it opened some 30km from the city centre in
the early-1990s – is now coming into its own as an international and
intercontinental hub and as a secondary conference location. These factors
apparently outweighed lost business in the Internet and high-tech sector,
which is concentrated in München.
• As a major
international financial centre, Frankfurt clearly felt the decline in world
capital markets in 2001. However, Frankfurt hotels still managed to report a
revPAR gain in euros of 2.6 percent, despite falling occupancy of 6.1 percent,
thanks in large part to trade fair and convention activity, including the
renowned biennial automobile trade fair (IAA).
• It was
widely anticipated that Berlin, as the new German capital, would benefit most
from a ‘millennium boom’ and performance did indeed improve significantly
in 2000. In 2001, rates continued to climb up 6.2 percent over 2000 levels,
but occupancy began to suffer as many rotating events moved on to other cities
and as the supply growth of recent years made itself felt.
• Nominally,
the biggest loser in 2001 was Hannover, reporting a 47.8 percent decline in
revPAR. Following the EXPO 2000 boom, the city’s hotels were left in 2001
with their traditional commercial demand base and with a significant increase
in capacity. Rates remained respectable in comparison with other cities at 91
Euros, but occupancy sank below fifty percent to reach fourty six percent for
the year.
•
Hamburg’s hotels also benefited from EXPO 2000 and suffered a corresponding
loss of business in 2001 with occupancy down 8.4 percent. In addition, the era
in which musical theatres with long-running productions drove significant
leisure demand to the Hanseatic city now appears to be ending. Berlin has
become a formidable competitor for the cultural weekends and short breaks that
contributed to Hamburg’s success in the 1990s.
• Düsseldorf
and Essen also registered declines in both occupancy and rate, reflecting a
weaker trade fair schedule than in 2000, as well as the overall economic
slowdown
Source:
HotelBenchmark.com
Asian
investors investing again Down Under
TravelWeeklyEast.com
- Asian
investors have returned to the Australian hotel market. Over the six months to
June 2002, Asian investors have snapped up almost 80 percent of the total
value of hotels sold.
"This
dominance surpasses the investment of the 1993-1994 era, which was the heyday
of the Asian hotel investors," said Mike Batchelor, executive vice
president, Jones Lang LaSalle Hotels.
During
the six months to June 2001, the only Asian investors active in the Australian
hotel market were Singapore-based Cockpit Hotels, which purchased the Terrace
Hotel in Perth.
In
contrast, 2002 has seen investors from diverse markets such as Hong Kong,
Macau, Indonesia and Malaysia vying for a piece of the action. In total, Asian
investors have spent A$258.2 million (US$145 million) to secure six hotels
comprising 1,057 rooms. Australian sellers represented 73.5 percent of the
transaction value.
Batchelor
said, "The numbers are not surprising given the current level of interest
being shown in Australian hotel and resort property.
"The
perception is that our economy has survived against all odds, posting strong
growth despite the Asian economic crisis, a slowing US economy and the events
of September 11. Astute investors are seizing opportunities presented within
the tourism sector which are largely ignored by the domestic investors and
institutions."
"Asian investors recognise the opportunity
to buy into these hotel markets at the bottom of the cycle and are positioning
themselves to benefit as these cities enter their recovery phases," said
Batchelor.
Cendant Reports
Record Results for Second Quarter 2002
/PRNewswire/
-- Cendant Corporation (NYSE:
CD) today reported record second quarter 2002 adjusted earnings per
share (including income from discontinued operations) of $0.40. The Company
raised its projection for adjusted earnings per share (including income from
discontinued operations) for 2002 to $1.45 from $1.36, a 38% increase over the
results for 2001. The increased forecast reflects better-than-expected second
quarter results, continued strength in the Company's real estate related
businesses and improving trends in certain of the Company's travel related
businesses.
Cendant's
Chairman, President and CEO, Henry R. Silverman, stated: "We are pleased
to report another record-breaking quarter with results that exceeded our
projections despite a challenging environment for commercial travel and
corporate spending. Strength in our residential real estate and vehicle
services divisions again proved the value of our diversified portfolio of
fee-for-service businesses. With demographic trends for real estate expected
to remain strong for years to come, travel trends expected to continue to
improve, and $2 billion per year in free cash flow, we look forward to the
future with confidence."
Second quarter 2002 Adjusted EPS includes $0.38 from
continuing operations and $0.02 of income from discontinued operations
consisting of our recently sold National Car Parks business. The increased
Adjusted EPS forecast of $1.45 for full year 2002 includes $1.40 from
continuing operations and $0.05 of income from discontinued operations
Global
Lodging Monthly from Deutsche Bank AG
The month
in Europe - investment commentary
Given the
absolute declines in share prices, it has been hard to convince hotel
executives that June has been actually been a good month for the stocks! In
reality, the calamitous state of broader equity markets (and the negative
’surprises’ that have been almost commonplace elsewhere), has resulted in
the hotel sector being seen as something of a ’safe haven’.
In terms of
the specific stocks in our universe, June was a steady if unspectacular month.
With the exception of Thistle (which we upgraded to Strong Buy from Market
Perform and which outperformed by some 16% during the month), each of the
other stocks recorded positive single-digit outperformance. Year-to-date
performance among the majors now ranges from a very reasonable 18% at Accor,
to a positively healthy 32% at Whitbread. Within the group of second-liners,
again all of the stocks have recorded solid outperformance with the
’stand-out’ remaining Queens Moat Houses – a stock that has now posted a
YTD 124% relative gain.
In terms of
newsflow this month there was relatively little of substance – it is that
time of year! That said, at the end of the month, Compass Group announced that
it was seeking offers for its Travelodge operation. This could provide an
opportunity for either Whitbread to consolidate its position as the UK’s
leading operator or, potentially, provide an entry point for an international
operator to secure a strong position in this fast-growing segment.
Andersen
survey data - Europe
The trading
performance across Europe remains mixed to say the least. That said, we are
now seeing consistently poor trading data coming out of the key German cities
as the economic environment continues to worsen.
Andersen
survey data - UK
For the
all-important London market, May showed a considerable improvement on the
performance of the previous four months. We suspect that June will show a
reversal of this trend given the very difficult start to the month caused by
the Jubilee celebrations. Nonetheless, it should not be forgotten that London
was already a very soft market during the summer months of 2001, with YoY
revpar declining by 18% in July and 11% in August.
The month
in Asia
As evidenced
by Figure 14, it was a mixed month for Asian hotel stocks. The World Cup in
Seoul and Japan failed to live up to expectations in terms of visitor numbers,
although it remains the case that the general trading environment for
hoteliers across the region is still a little better than one would have
assumed a few months ago.
For more
info please contact:
Mark Finnie
Pan European Analyst
Deutsche Bank
Tel: 44 131 243 4221
E-mail: mark.finnie@db.com
Web site: www.db.com
All Deutsche
Bank global lodging research is posted on the Deutsche Bank
research web site.
Source: HotelBenchmark.com
Visitors
flooding into China
More than 6 million foreigners from 234 countries and regions
entered China during the first six months of this year, the government said
Tuesday, a marker of international interest in a country that has made a
priority of "opening up" to the world.
During the same period, 7.35 million Chinese went abroad to 226
countries and regions, the official China Daily newspaper said, quoting the
Ministry of Public Security's Bureau of Exit and Entry Administration. It said
that number had increased by nearly 34 percent.
The number of people going in and out of China's ports hit a record
high of 107.9 million since January, a rise of 12 percent, the ministry said.
"People are finding it easier nowadays to exit and enter the
Chinese border," China Daily said.
Most who entered and left -- more than 77 million -- were from or
went to Hong Kong and Macau, special administrative regions that returned to
China in the past five years. Hong Kong was a British colony, Macau a
Portuguese one. Some 3.5 million came from or left for Taiwan, the government
said.
The government does not consider travel to Taiwan, Hong Kong or
Macau to be travel abroad.
The top 10 destinations for Chinese mainlanders were Hong Kong,
Macau, Thailand, Japan, Russia, South Korea, the United States, Singapore,
Vietnam and Australia. The leading 10 countries from which people enter China
were Japan, South Korea, Russia, the United States, Malaysia, the Philippines,
Singapore, Mongolia, Thailand and Britain.
The figure for foreigners entering China was 6.14 million, up 16
percent from the same period last year, China Daily said.
Sources
with the ministry, quoted by China Daily, also said they dealt with 27,300
people who violated various Chinese regulations and laws, including 2,517
criminal suspects.
Celebrating
half a year of achievement, the Carino Collection outperforms in corporate
travel market
The CARINO Collection opens London office, has a portfolio of more than 70 hotels in less 6 months
Six months after its official
launch, The CARINO Collection has come a long way led by President Joe Carino,
The CARINO Collection has built a portfolio of more than 70 hotels, with six
in New York City alone. To coincide with the celebration of its six-month
anniversary, Carino announced today the opening of new offices in London,
England, at 23 Berkeley Square W1J 6HE, London UK.
The Carino Collection is a full
service sales and customer information company that helps hotels build
business by connecting them to corporate, group and leisure business customers
quickly, easily and cost-effectively.
Members of the Carino Collection
enjoy corporate travel sales support, in addition to a proprietary database of
client profile information that provides a revolutionary new resource for
sales outreach. Members also benefit from the CARINO Collection’s
consultation, sales support and database management services.
Carino said, “We’ve
accomplished so much in six months. With six hotels in New York City and more
to come, we will soon become the top provider of corporate and group sales
support for independent hotels in Manhattan. We also expect our international
portfolio to expand rapidly. Our new office in London will give us the support
we need overseas to operate efficiently and provide direct in-market support
to international properties such as The Landmark London in England.”
At the heart of the CARINO
Collection’s services is SalesConnectTM, a
web-accessible database of corporate, leisure and group account information,
available only to CARINO Collection members. It enables hotel sales
professionals to maximize sales potential by gathering real-time, up-to-date
contact and business profile information on existing and potential clients.
For hotels that rely on corporate and consortia business, SalesConnectTM
is linked to a variety of on-line RFP tools to facilitate on-line submission
of completed proposals.
Carino explained, “SalesConnectTM
allows us to provide a valuable service to hotels, especially independent
hotels. It gives them a competitive edge by providing up-to-date contacts and
leads for their sales staff. In this tough market, information such as this
can allow a hotel sales department to be more responsive and effective. We are
very pleased with the positive feedback from our clients.”
Additional personalized member services provided by
the CARINO Collection include:
·
Sales database management
·
Global and regional sales office support
·
Marketing support via cooperative marketing opportunities and negotiated
packages to support key distribution partners
·
Direct links to online-RFP tools
·
Special CARINO Collection Rates at all member hotels
·
Clearing, holding and reserving space for special accommodations
·
Special Carino Concierge Desk to assist with special needs
The
CARINO Collection is a full service sales and customer information company
that helps hotels build business by connecting them to corporate, group and
leisure business customers. For further information on services available or
for membership information, contact: jcarino@carinocollection.com
Arabian
Travel Market 2003 sales off to flying start
AsiaTravelTips.com
- Floor space sales for
the 10th edition of Arabian Travel Market - the Middle East's premier travel
and tourism show - have got to an early flying start with a host of
destinations and hotel groups expanding the size of their participation for
2003.
"Response from the Middle
East, North Africa and Asia has been particularly strong," said Matt
Thompson, Group Exhibition Director, Overseas Events, Reed Travel Exhibitions
(RTE), which organises Arabian Travel Market.
"Substantial stand increases
have been booked by the Government of Dubai and Dubai Civil Aviation, Kuwait,
Oman, Gulf Air, the Tourism Authority of Thailand, Meridien Hotels &
Resorts and Shangri-La Hotels & Resorts while Qatar, Malaysia, the
Karnataka Government and Goa Department of Tourism have almost doubled the
size of their participation for 2003.
"Morocco, Tunisia, the
Jakarta City Government Tourism Office and Andhra Pradesh have doubled their
stand sizes while Singapore's Raffles International Hotels & Resorts has
more than tripled its participation."
Arabian Travel Market 2003 will
be held at Airport Expo Dubai in the United Arab Emirates from May 6-9. RTE
says it now anticipates the 2003 event will be the largest in the show's
history and will have a wider geographic appeal.
"This bullish outlook is
based not only on contracted growth from regular exhibitors but also on the
fact that we are receiving strong interest from a number of new exhibitors who
visited this year's show and have now decided to participate next year. We are
well on course to exceed this year's geographic participation of 56
countries," said Thompson. "Overall the early response indicates a
renewed optimism from an industry which was one of the most badly affected by
the events of September 11th last year."
Arabian Travel Market has
recorded annual growth since its inaugural event in 1994.
"This year the growth was
minimal - just 2.4% - which delivered a 8,500 square metre event with over 700
exhibitors from 56 countries," said Thompson. "Nevertheless given
the difficult trading conditions in the previous few months, we viewed this
fractional growth as a success.
"We now think next year's
event will revert to the double-digit growth seen every other year."
Arabian Travel Market will
celebrate its 10th anniversary next year and RTE says it's looking to build on
its existing decade of success.
"We will run a series of
educational seminars at the 2003 show following the success of this year's
programme and are also looking to repeat the highly successful I.T. Forum for
the travel industry introduced alongside the 2002 show," added Thompson.
"Another key factor in our
optimism is that the Arab Ministers of Tourism summit will be held in the UAE
at the same time as Arabian Travel Market 2003. We believe this summit will
enhance overall interest in the regional tourism industry, which will benefit
the show. We also hope the ministers will attend the show's opening
ceremony."
RTE has also disclosed that its
hosted buyer programme for 2003 will target 50 of the world's leading
Meetings, Incentives, Conventions and Exhibitions (MICE) buyers as well as 20
of the top travel purchasers from throughout the Gulf Co-operation Council (GCC).
They will stay at the five-star deluxe Grand Hyatt Dubai, which will be the
largest conference and convention centre hotel in the UAE when it opens in
January, and meet exhibitors in an appointment-setting session on the first
day of the show.
RTE, which is part of Reed
Exhibitions (RX), organises 12 events worldwide, including World Travel
Market, Arabian Travel Market, C.I.S. Travel Market, EIBTM, British Travel
Trade Fair, International Luxury Travel Market, International Golf Travel
Market, La Cumbre, Mediterranean Travel Fair, Top Resa, AIME and ICCA
Exhibition in association with ICCA Congress
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