|
|
.
|
Newsletter - February 6, 2002
|
THE HOTEL INDUSTRY’S PERFECT STORM… A TOUGH
2002 LIES AHEAD
(BUSINESS WIRE) - The
Hospitality Services Industry is facing what may be its toughest
year in recent memory. The combination of the World Trade Center
attack, ensuing war on terrorism, drop in the stock market and
prolonged reductions in corporate travel, have combined to make for
what may very well be the worst period in the last twenty years. In
a report released today, Ernst & Young's Hospitality Services
Group describes the challenges this year will bring, analyzes the
major U.S. markets and offers advice on how to ride out the storm.
The report titled, 2002 National Lodging Forecast is available at: www.gallen.com/eykl/HSGReports.htm
Hotel operators are dealing with some difficult issues that have all
hit at once and made hospitality operations especially difficult
right now, says report author and Ernst & Young's Hospitality
Services Group National Director Chase Burritt. We're facing some
slow months ahead in the hospitality industry and the smart players
are making moves now that will help ensure they can ride it out and
be properly positioned when recovery begins, he added.
Not surprisingly, the report found that some markets are fairing
better than others. San Diego is poised to recover the fastest,
within three months. Markets like Baltimore, Chicago, Detroit and
San Antonio are set to recover in five months. Atlanta, Boston,
Dallas, Denver, Houston, Los Angeles, Miami, Orlando, Philadelphia,
Phoenix, Puerto Rico, Seattle and Washington D.C. should recover in
six to twelve months. However, Hawaii, Manhattan and San Francisco
may take up to fourteen months before they recover.
Another of the industry-wide effects is the slowing of new hotel
construction. While seemingly a negative, Burritt points out that
the slow construction growth may actually be a positive. Today,
there are fewer rooms under construction than at any other time
during the past three years. That slowing in supply should actually
stabilize occupancy rates and help the recovery process begin to
take hold in 2002, said Burritt.
Hotel profit margins dropped in 2001 and that trend will continue
for 2002. As the margins get thinner hotel stocks will continue to
drop and loan defaults become a real possibility for some of the
upper-end hotels, where expensive services are the norm and
operators are more reluctant to cut prices. However, for investors
this dip in the market may present good buy opportunities to snap up
temporarily undervalued stocks at a discount.
Instead of only predicting doom and gloom for the industry,
Burritt's group has been helping hotel companies implement some
changes that impact the bottom line immediately and offset many of
the external problems occurring in the marketplace.
Burritt sees a recovery for the industry beginning in 2003 and the
market returning to normal in 2004. His report offers strategic
advice so hotel operators can analyze their operations and find cost
reductions that have a minimal impact on staff and can be realized
in the short term. The report provides thoughts on cost containment
and operational efficiencies including changes in staffing
schedules, energy strategies, management company selection, property
valuations and asset management.
The complete report -- 2002 National Lodging Forecast, which
includes Ernst & Young's market analysis on original research
and numbers compiled by Smith Travel Research, can be downloaded at:
www.gallen.com/eykl/HSGReports.htm
About Ernst & Young (E&Y) Hospitality Service Group
The Hospitality Services Group of Ernst & Young is considered
one of the largest and most effective advisory practices in the
world. The Hospitality team is focused on delivering value-added
solutions that are focused and quick to implement. Industry
authorities for over 25 years, the E&Y Hospitality team provides
research and analysis of worldwide industry movements and
opportunities. Market research and analysis is just one component of
its full range of client services. From lodging to tourism, from
finance to operations, the industry looks to Ernst &Young to
create value in its coordinated delivery of advisory, tax and audit
solutions. The hospitality team covers markets in North America,
Europe and Asia.
RITZ-CARLTON
TIPPED FOR UK DEBUT
Marriott
is planning to launch its five-star brand Ritz-Carlton into the UK,
according to Sunday Business . Ed Fuller, president of
international lodging for Marriott International, is reported to
have said that Marriott Executive Apartments and Execustay are also
being lined up for the UK with Manchester, Glasgow and London at the
head of its wish list.
Ritz-Carlton offers ‘elegant five-star opulence', according to SB.
The UK move is part of Marriott’s aim to have all three of its
city products – Marriott, Renaissance, Ritz-Carlton – in very
‘gateway city’ in the world
FIU TO CO-HOST FLORIDA HOTEL CONFERENCE
Florida
International University’s School of Hospitality Management is
teaming up with HVS International, a global hospitality-consulting
firm, to host the second Florida Hotel Conference.
The daylong meeting is scheduled for May 17, 2002 at the Kovens
Conference Center in the FIU- Biscayne Bay Campus, located at 3000
N.E. 151 St.
The
conference is designed to be a one-day meeting with educational and
interactive discussions and panels geared towards hotel owners,
operators, developers, management companies, lenders, attorneys and
other professionals involved in the Florida market. The conference
will begin with a detailed presentation by Smith Travel Research
that will give an overview of occupancy, average rate performance
and impact on hotel markets after the Sept. 11 terrorist attacks.
“This
conference will provide industry professional with new insights into
the development of new lodging products during theses challenging
economic times, ” said Joseph J. West, FIU dean of FIU’s School
Hospitality Management.
A
registration fee of $299 includes continental breakfast, lunch and
refreshments.
For
more information about the conference and to register call (1)-
305-919-4502 or log on to www.fiu.edu/ihter.
P A T A NEWS
TOURISM INDUSTRY FIGHTS BACK
PATA Compass magazine is seeking member feedback for its
March-April lead feature entitled, "The Industry Fights
Back." Mr. Marcus Matthews-Sawyer, Editor, would like quotes
and details of measures your organisation has implemented
post-September 11 to restore confidence, reduce expenditure or
improve productivity. Pertinent opinions, observations and head and
shoulder pictures (jpeg format) of your company’s opinion leader
gratefully received at marcus@mediatransasia.com. Fax: (66-2)
204-2391. Deadline: February 8.
THE CHANGING WORLD AND ITS IMPACT ON TOURISM
Plenary Session 1 of the 2002 PATA Annual Conference, April
14-18 in New Delhi, will feature a panel discussion on "The
Changing World and Its Impact on Tourism." Speakers include Mr.
Michael Elliott, Editor-at-large, TIME; Dr. Surin Pitsuwan,
Thailand's Former Foreign Minister; and Professional Futurist Mr.
Richard Neville. Visit www.pata.org
for PATA Annual Conference registration forms, airline discounts,
programme information and pre- and post-Conference tour options.
Fax: (66-2) 658 2010. E-mail: conference@pata.th.com.
25th PATA TRAVEL MART CELEBRATES ADVENTURE
This year (the International Year of Mountains) the 25th
PATA Travel Mart, April 9-12 in Singapore, will put the spotlight on
the rapidly growing adventure travel niche. In addition, a large
delegation will be promoting Nepal, the official feature country of
the 25th PATA Travel Mart. For more information, visit http://www.patatravelmarket.com/page.cfm
or contact Mr. Andrew Lee, Director - Sales and Marketing, Reed
Travel Exhibitions. Tel: (65) 434 3586. Fax: (65) 338 7395. Email:
andrew.lee@reedexpo.com.sg.
NORTH AMERICA PATA SPECIALIST PROGRAMME NOW ONLINE
Part one of the PATA Pacific Asia Travel Specialist
programme is now available for registration and participation at www.travelweekly.com.
Retail travel agents in North America who sign up for the programme
will receive numerous benefits to help them sell the Pacific Asia
region to clients. The annual fee of US$100 includes full PATA
membership, local chapter membership, inclusion in the PATA retail
travel agent search engine for consumers and a scholarship toward
the North Asia or Pacific educational programme offered by the
Institute of Certified Travel Agents (ICTA). Information about the
programme is being sent to local PATA Chapters.
NEW MICE GUIDE TO BALI
PATA-member Bali Discovery Tours has teamed up with Pacific
Asia Travel News to produce 14,000 copies of The Bali MICE Guide
2002. To receive a copy of the 92-page full colour reference guide,
e-mail: info@micebali.com (previous e-mail problems have been
solved) or visit www.micebali.com.
PATA STRATEGIC INFORMATION CENTRE WORLDWATCH
* Cathay Pacific is giving 10,000 inbound return tickets to
Hong Kong SAR residents who nominate friends or relatives to visit
the territory.
* Japan's unemployment rate climbed to 5.6 percent in
December as firms cut payrolls and households cut spending. The
number of people out of work in 2001 rose to 3.4 million, exceeding
three million for the third consecutive year.
* After a break of more than 20 years, Iran will resume
direct commercial flights to Baghdad, Iraq. The Iraqi Foreign
Minister paid a rare visit to Iran and confirmed the deal.
EUROPE’S HOSPITALITY INDUSTRY IN 2001: FRANCE IS DOING
BETTER THAN ITS EUROPEAN NEIGHBOURS
Despite the events of 11 September that penalised the
entire hospitality industry, this year France posts a new record
with a RevPAR that has grown by +1.6%.
Methodology: This survey was carried out using a sampling of
3,700 hotels that belong to corporate operated chains in Europe,
representing 380,000 rooms. The data has been collected hotel by
hotel, on a monthly basis. It has been organised according to the
distribution by category of the supply of corporate operated chains
and to the importance of each country in the European Union.
These
results are determined from figures provided by hotel chains in
France and Europe, for which MKG Consulting provides official
statistics. The definitive results and the full report concerning
the hotel business in France and in Europe will be published in the
February/March 2002 double issue of H T R Eurotrends &
Marketing, which will be available in March.
France takes the lead
RevPAR France: +1.6% in 2001
RevPAR Europe: -2.9% in 2001
Southern Europe show the best outcome
France, Italy, Spain and Portugal produce the best results
Budget segments remain as strong as ever
Significant growth of the RevPAR in 0* / 1* / 2*
Only 4-star sees a drop in the RevPAR
RevPAR 4* Europe: -6.8% in 2001
Cumulated Results on 2001 for
Corporate Operated
Hotel Chains, By Country, Across all Categories
|
Country
|
OR
2001
|
Evol
OR 2001/2000
|
Average
Daily Rate 2001
|
Evol
ADR 2001/2000
|
RevPAR
2001
|
Evol
RevPAR 2001/2000
|
|
Germany
|
60.8%
|
-2.9
|
87.0
|
0.1%
|
52.9
|
-4.5%
|
|
Austria
|
66.0%
|
-3.1
|
86.8
|
-0.2%
|
57.3
|
-4.6%
|
|
Belgium
|
67.6%
|
-3.0
|
92.4
|
1.2%
|
62.5
|
-3.0%
|
|
Spain
|
66.8%
|
-4.4
|
104.5
|
3.9%
|
69.8
|
-2.6%
|
|
France
|
69.9%
|
-1.3
|
69.3
|
3.5%
|
48.4
|
1.6%
|
|
Great
Britain
|
72.5%
|
-2.8
|
143.9
|
-2.9%
|
104.3
|
-6.5%
|
|
Italy
|
68.2%
|
-1.7
|
104.4
|
2.4%
|
71.1
|
-0.1%
|
|
The
Netherlands
|
72.2%
|
-4.8
|
108.8
|
1.8%
|
78.5
|
-4.5%
|
|
Portugal
|
67.5%
|
-4.5
|
77.9
|
10.0%
|
52.5
|
3.1%
|
|
European
Union
|
67.7%
|
-2.8
|
97.2
|
1.1%
|
65.8
|
-2.9%
|
Source:
MKG Consulting Data base – January 2002
Official
hotel chain statistics
The average
daily rate and RevPAR are shown in euros tax incl.
Cumulated Results on 2001 for
Corporate Operated
Hotel Chains, by Category - European Union
|
Category
|
OR
2001
|
Evol
OR 2001/2000
|
Average
Daily Rate 2001
|
Evol
ADR 2001/2000
|
RevPAR
2001
|
Evol
RevPAR 2001/2000
|
|
0*
|
76.9%
|
-0.7%
Pts
|
24.9
|
5.2%
|
19.1%
|
4.2%
|
|
1*
|
74.7%
|
-0.8
Pts
|
33.1
|
5.2%
|
24.7
|
4.1%
|
|
2*
|
69.4%
|
0.0
Pts
|
60.9
|
3.9%
|
42.3
|
3.9%
|
|
3*
|
65.4%
|
-2.2
Pts
|
87.1
|
4.4%
|
56.9
|
1.0%
|
|
4*
|
67.0%
|
-5.3
Pts
|
147.0
|
0.6%
|
98.5
|
-6.8%
|
|
Global
|
67.7%
|
-2.8
Pts
|
97.2
|
1.1%
|
65.8
|
-2.9%
|
Source:
MKG Consulting Data base – January 2002
Official hotel chain statistics
The average daily rate and RevPAR are shown in euros tax incl.
|
European
Union Zone: a good first semester, a difficult second semester and, at the
end, a fairly restrained drop for the RevPAR
Despite
the events of 11 September, Europe’s hotel industry shows a drop of only
2.9% for the year 2001. This drop is exclusively due to an average 2.8
point drop in the occupancy rate to 67.7%. In fact, the average daily rate
grew by 1.1% in 2001 to 97.2 euros. The countries of the European Union
had to face a series of events in 2001 that included an economic slump
relatively early in the year and economic events (the BSE and foot and
mouth disease crises in the United Kingdom). Nonetheless, in the end,
Europe’s hotel industry experienced a good first semester with cumulated
growth for the RevPAR on 6 months of +4% at end June 2001.
Thus,
although 2001 closes with a negative score, the foundations are solid. A
sign of good health is that the sector continues to merge: the year will
have been marked by the closing of the purchase of the hotel pole of the
group Compass as well as, in particular, the cession of the Le Méridien
brand to Nomura, and that of Posthouse to Six Continents (ex-Bass Hotels
& Resorts). Another emblematic buyout of the year is that of the
Scandinavian leader Scandic by Hilton, which is clearly asserting itself
in Northern Europe.
It
is still too soon draw up the results in terms of development, but 2001
may otherwise be characterised by significant growth in supply, revealing
the favourable long term forecasts for the whole of the profession. Thus,
the drop in occupancy rate needs to be interpreted with great caution
because in certain instances (1* in France, for example), growth in supply
more than compensates for the drop in the occupancy rate; in the end, the
total number of rooms sold in 2001 is higher than that for 2000.
In
general, the budget categories had a year 2001 that was similar to
previous years. This year, the RevPAR is once again showing growth and the
average daily rates are clearly improving (in the region of +4/5%). Only
4* shows a drop in RevPar (-6.8%).
France
in the lead of European countries
Southern
Europe posts the best results in 2001. Spain, Italy, and above all France
and Portugal post better results than other European countries. For all
these countries, the drop in the RevPAR did not surpass –2.6%. In
France, the indicator grew by +1.6% and in Portugal the increase reached
+3.1%. This year, France, the number one tourist destination world wide
(+2% for tourists in 2001 according to the Minister of tourism), confirmed
its role as the destination country par excellence. The occupancy rate
lost “only” 1.3 point, giving it the best performance in Europe. The
average daily rate, on the other hand, is on the rise and its growth
reached +3.5% (only Spain and Portugal did better in this area).
Immediately following the events of 11 September, MKG Consulting
forecasted growth in the RevPAR of +2 to +4% for 2001 in France. We thus
came very close in our previsions.
Many
factors may explain France’s good results. First of all France was less
affected by the slump in the American economy (than Germany, for example).
Then, aside from the “11 September after-shock” that hurt all European
countries, France did not have to stand up to penalising external factors
the way the United Kingdom did, for example, with foot and mouth disease.
Another factor is that France differentiates itself from other European
countries by the high number of budget categories (0*/1*/2*) in its
national supply. Meanwhile, the budget categories were untouched by the
events of 11 September (+4/5% for the RevPAR in 0*/1*/2*). Unaffected by
the shake-ups and external factors, France’s budget segments have posted
progress with outstanding regularity for the past decade or so. Finally,
in today’s context, there is every reason to believe that a carryover of
clientele (in both the tourist and business segments) from other areas in
the Mediterranean (North Africa, and the Middle East towards Europe) took
or will take place. France, like Italy or Spain, should thus be among the
first to rise up.
A
year to forget for Great Britain
Great
Britain posted a drop in its RevPAR by -6.5%, a figure that may almost be
considered minimal in light of the extreme penalising factors the country
was up against: following the BSE and foot and mouth disease crises, Great
Britain, more than any other country in Europe, was affected by the events
of 11 September. In London, in particular, 4* hotels posted record lows.
The scarcity of American customers has had a heavy toll on results for
British hotels because they are a significant part of the clientele mix.
Nonetheless, the outlook remains good for this country as the good
economic results show (the United Kingdom should post the best growth rate
in terms of GDP in the European Union). Another sign of good health is the
large development of the hotel supply that was over +8% at end 2000.
A
RevPAR down by –3% to -–5% for Continental Europe and the Benelux
In
Germany, Austria, The Netherlands and Belgium, the drop in the RevPAR in
2001 falls between –3% and –5%. These countries all experienced a
strong impact in the aftermath of 11 September and were affected by the
drop in growth in the United States. There are a few particularities
nonetheless: for The Netherlands and Belgium, the year 2000 (European
football championship) was exceptional (+14.8% for the RevPAR in Belgium,
+17.8% for the RevPAR in The Netherlands). It is thus logical that 2001 be
slower. As far as Germany is concerned, the overall situation of the
country should not hide the strong differences from region to region. In
fact, while the RevPAR is looking at growth in Munich and Berlin (+4% and
more), the figure is down in Hamburg and saw moderate growth in Frankfurt.
Finally, Austria, once again, is among those countries with the worst
results this year.
The
major cities were clearly affected by the events of 11 September
Europe’s
major cities did not experience the best year ever. London saw the
steepest slide (-10.4% for the RevPAR on the year). The downtrend is above
all the result of a drop in the occupancy rate (-6.7 points to 75% on
average!). Paris and Brussels also closed the year with a decline (-3.4%
for the RevPAR in the two cities). In Paris, the occupancy rate is down by
4.8 points for the year (74.5%) and the average daily rate is up by 2.9%.
Rome sings the same tune with a RevPAR down by about 2.5%. Two other
capitals, however, post a RevPAR on the rise: Madrid (+1.4%) but above all
Berlin (+7.4%). Berlin’s results are not surprising. Since the city
became Germany’s new capital, it has been undergoing massive growth.
Although
the conflict in Afghanistan is nearing its end, tourists nonetheless do
not seem to be fully reassured. However, signs of recovery are evident.
MKG Consulting forecasts recovery for Europe’s hotel industry in the
second semester 2002. The outlook for 2002, along with the main trends for
the hotel industry, will be presented during the “6th annual meeting of
the European hotel industry’s decision makers, Marketing trends and
strategies 2002” Monday, 11 March 2002 at the Maison des Centraliens*.
Definitive figures will be published in the double
February/March issue of H T R Eurotrends & Marketing, which will be
available in March.
MILLENNIUM
HOTELS AND RESORTS ANNOUNCE GLOBAL EXPANSION OF MJU RESTAURANT CONCEPT
Millennium Hotels and Resorts, the
hotels arm of Singapore controlled Hong Leong Group has announced a global
expansion of the restaurant concept branded Mju.
Following the successful launch of
the concept at the Millennium Hotel London Knightsbridge, the
international hotel company intends to introduce the Mju brand into
selected gateway cities throughout the world.
Mju London in Knightsbridge’s
Sloane Street was established by Millennium Hotels and Resorts in
conjunction with Tetsuya Wakuda, the world-renowned Chef from Sydney,
Australia. Tetsuya has gained a global reputation for his Sydney
restaurant – Tetsuya’s.
Mju restaurants will operate
independently under Millennium Hotels and Resorts and Tetsuya Wakuda will
provide an advisory role.
The Mju operation will be
introduced later this year in the USA. Further expansion is to be
considered for introduction in Singapore, Paris and the USA as well as
various locations in the Middle East in destinations where the company may
develop new hotel ventures.
Following the establishment of Mju
London, Tetsuya will advise Millennium Hotels and Resorts in the opening
of further Mju outlets with key staff who have been trained in Tetsuya’s
unique cuisine.
Chris Behre, presently Executive Chef at Mju
London restaurant will be taking a lead role to extend the Mju brand into
Millennium Hotels and target
restaurants outside the UK. He and a number of his team members, already
with many years of experience under their belt, have acquired intensive
experience working with Tetsuya and share his spirit and passion in
exquisite culinary skills.
Tetsuya Wakuda said: “I am
pleased to have assisted Millennium Hotels and Resorts in establishing the
Mju concept in London and look forward to advising on future developments.
During the past two years both myself and my team in Sydney have enjoyed
training and developing Millennium staff in the discipline of our
cuisine.”
Tony
Potter, Chief Operating Officer, Millennium & Copthorne Hotels plc,
commented: “We are pleased with the success to date of the Mju concept
and look forward to Tetsuya advising on future developments. During the
period of Tetsuya’s consultancy a full team has been trained in his
kitchen and restaurant. Our talent at Mju is fully experienced in
Tetsuya’s style and we will continue to utilize the Sydney restaurant to
further develop expertise in the future for any Mju outlets.
“We have enjoyed working closely
with Tetsuya and are delighted that a relationship will continue in the
future.”
|
