Hospitality industry remains robust despite economic turmoil, finds survey
Despite battling a perfect storm of high VAT rates, low consumer spending and the on-going European economic turmoil, the survey carried out by Deloitte reveals that only 12 per cent of executives are experiencing worsening trading conditions.
And when it comes to locations of future hotel development, the UK (with 46 per cent of votes) was the most popular choice amongst the big five European markets, followed by Germany (30 per cent) and France (16 per cent).
“Despite on-going economic uncertainty, global hotel transactions in the first half of 2011 were over double the same period in 2010, said Nick van Marken, global head for advisory, travel, hospitality & leisure at Deloitte.
Speaking at the 23rd Deloitte European Hotel Investment Conference in London yesterday, Van Marken added: “London has had a spectacular year so far, with revPAR 11 per cent higher than 2010 and 13 per cent ahead of the previous peak, reflecting the importance of the city as a true global gateway and one of a triumvirate of unique global hotel markets along with Paris and New York.”
2012 clouded by uncertainty
Looking ahead, the outlook for 2012 remains mixed. A year packed full of once-in-a-lifetime events including the 2012 London Olympics and the Queen’s Diamond Jubilee, the majority of survey respondents (58 per cent)anticipate UK regional hotel performance will remain flat.
“The outlook remains clouded by uncertainty with the situation in the Eurozone only adding to the feeling of unease,” added Van Marken. “Funding continues to be a challenge as lenders focus on reducing their balance sheet risk. Cash-rich investors have been the main beneficiaries of this credit squeeze and several all-equity deals have been seen.
“Corporates in particular are sitting on significant cash but remain reluctant to invest in this environment. We all need confidence to make investment decisions and that continues to be in short supply. Hoteliers, of course, remain eternally optimistic.”
