With talk of recession, global chaos, inflation etc dominating most conversations these days, all hoteliers have been readying themselves for a tough year or two ahead.
So what are the facts and how badly is the industry affected? I looked out for some quick numbers which have been in the news recently and this is what I found.
TRI Hospitality Consulting’s latest HotStats report - July was a mixed month for European chain hotels, with year-on-year profit growth in half of the cities surveyed by TRI Hospitality Consulting’s latest HotStats report. Income before fixed charges (IBFC) - also known as gross operating profit - increased in Budapest, Hamburg, London, Munich and Paris.
Data from STR and STR Global - The global hotel industry recorded positive growth in average daily rate and revenue per available room for the month of July 2008, according to data from STR and STR Global. July occupancies fell in all but one world region. Data for the survey was gathered from more than 36,150 hotels comprising 4.93 million guestrooms worldwide.
HotStats survey from TRI Hospitality Consulting - The Farnborough Airshow contributed to strong profit growth for London’s chain hotels during July, according to the latest HotStats survey from TRI Hospitality Consulting. Total sales in London were up by 14 per cent helping payroll as a percentage of total revenue drop by 1.9 points to 22.1 per cent. Farnborough also had a positive effect on London’s year-to-date figures with IBFC growth at 7.3 per cent outstripping total revenue growth of 6.7 per cent.
In the rest of the UK - referred to as the provinces - the impact of rising costs was notable for the second consecutive month. The sample of 401 chain hotels reported a 3.2 per cent fall in daily IBFC to £36.26 per available room despite total sales edging up by 0.3 per cent.
Analysis by Deloitte Touche Tohmatsu - Middle East enjoys highest hotel occupancy in the world for first half 2008. RevPAR in the Middle East grew 21.6% to US$135. “The region also had the highest occupancy and average room rates in the world at 75.3% and US$180 respectively,” said Rob O’Hanlon, Tourism, Hotel and Leisure partner at Deloitte Middle East.
US Department of Commerce’s Office of Travel & Tourism Industries - The US is bucking global trends, having shown a strong aggregate gain in international arrivals year-on-year in the first five months of 2008. According to the US Department of Commerce’s Office of Travel & Tourism Industries (OTTI) the US recorded strong international inbound growth of almost 12% from January to May 2008. For the 12 months ended May 2008, the US welcomed a record high number of arrivals of close to 52 million.
I can see that the going isn’t great especially compared to 2007, but no big long term downturns here that I can see - am I missing something? Probably! Or maybe not….
Guess this is where the cliche of ‘cautiously optimistic’ comes from……………I’d agree and be cautiously optimistic!|
Absolutely wacky and in true british beach holiday spirit - and a great video from the BBC to cover it. Click here to see it for yourself
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If you are really particular about how you travel and where you stay - not just which airline and/or class or which hotel brand, but to exactly pick out where you want to sit and where you want to sleep, check out these websites.
Seatguru launched in 2001 by frequent flyer Matthew Daimler - He started with a single color-coded interactive airplane seating chart. Having experienced firsthand the vast differences between airline seats, he was determined to collect this useful information and share it with other travelers. Now seatguru.com covers more than 300 airplane seatmaps from more than 45 different airlines and was purchased by Trip Advisor in 2007.
Seat 61 is not strictly comparable but a unique site dedicated to train travel around the world - if you want to know something about trains in Inner Mongolia to the palace on wheels in India, this is your ultimate resource.
Tripkick - and now tripkick.com promises to do for the hotel industry what seatguru.com has done for airlines - early days yet with the site covering some US regions, but it has every chance of taking off.
J.W. “Bill” Marriott, Jr., chairman and CEO of Marriott International at the World Travel and Tourism Council Summit in Dubai (20-22 April)in his key note address.
He made this particular remark in connection with Marriotts ambitious new project to help protect the planet partnering with the Brazilian State of Amazonas to preserve and protect 1.4 million acres of the Amazon Rainforest.
His other major theme was Travel mobility and trade. “Every time an international visitor visits Palm Island (Dubai), or shops on New York’s Fifth Avenue or Tokyo’s Ginza, it’s the same as exporting a Caterpillar tractor, an Airbus jet, a Sony Playstation or… oil.
Asking governments to encourage and facilitate travel, he pointed out that the US share of overseas international travel has fallen 8% since 2000 while rising 28% in the rest of the world and said that it was a huge lost opportunity for America.
In an ABTN interview with Rotana area vice president Dubai & Northern Territories, Omer Kaddouri mentions aggressive growth plans with ten hotels opening in 2008.
On the question of being able to maintain rates in the face of stiff competition, Kaddouri mentions that the group will be looking at almost a 20% increase for the following year !! With nearly 60 days a year when all of Dubai is sold out, no reason to question that I guess…..
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Hyatt seems to have taken the first steps in this direction with its year long contract with Hospitality Graduate Recruitment. The Swiss based recruitment consultancy will support over 110 Hyatt hotels with their recruitment strategies.
So what is the arrangement exactly?
According to HGR, ” For the next twelve months, HR departments across Hyatt International hotels in Europe, Middle East, Asia, Africa and South America will have unlimited access to HGR’s comprehensive on-line database. The database will help Hyatt’s HR staff source and recruit suitable hospitality graduates and undergraduates for a variety of entry level, trainee, supervisory and junior management positions. There is also a facility by which job opportunities can be posted.”
With more and more companies expanding rapidly, finding the right talent is certainly the biggest challenge facing the industry. Innovation and out of the box thinking will be critical for the industry in this area in the coming decade.
A comment from Professor Walter Jamieson of the University of Hawaii speaking at the PATA Annual Meeting session “Human Capital Challenge - It’s Time to Invest, caught my interest - He says “In travel and tourism we’re good at product and market development, but HRD is rarely central to industry growth strategies, and good workforce development strategies are hard to find.”
And it is high time the industry adapted quickly and made it a central theme…..
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This is the prediction from the latest research by the World Travel & Tourism Council (WTTC) published last month. So the catchphrase which has been doing the rounds recently ”cautious optimism” to describe the mood in the hotel industry seems fairly justified.
It says that World Travel & Tourism is expected to generate close to US$8 trillion in 2008, rising to approximately US$15 trillion over the next ten years.
According to the WTTC President Jean-Claude Baumgarten, it is the continued strong expansion in emerging countries - both as tourism destinations and as an increasing source of international visitors which keep the prospects bright.
The study says that ”Regionally Africa, Asia Pacific and the Middle East are experiencing higher growth rates than the world average, at 5.9%, 5.7% and 5.2% respectively, while the mature markets, most notably the Americas and Europe, are falling below the world average with a growth at 2.1% and 2.3 % respectively”
So who will win in this new emerging scenario? According to Alex Christou, Managing Partner of Accenture’s Transportation & Travel Services (Accenture partnered with WTTC in this research) said “High performance companies will differentiate themselves by being highly focused on their individual customers. The winners will be companies that take a balanced view, driving customer intimacy and product innovation while driving non-value added costs out of their operations.”
176 countries were covered in this WTTC research.
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