31 January 2013 | InterContinental Hotel, Park Lane, London
EY Real Estate and Hotels Workshops
‘Setting a course for the future’
Earlier this year, EY’s fourth annual Hotels Workshop, held in London, brought together more than 100 senior professionals from the hotel industry. Amid lively debates and frank appraisals of the challenges ahead, some positive themes emerged: the opportunity for brands to thrive in uncertain times; the pressing need to maintain and develop assets; and the importance of building customer loyalty to counteract the challenge of online discounters and to attract conservative investors.
This report features some of the insights from the workshop and also the results of interactive polls that captured the views of the professionals who attended.
2013: back to basics as the going stays tough
After a year that may have lived up to expectations, but generally failed to exceed them, 2013 looks to be another challenging year for the European hotel sector. Optimism may be returning on one side of the Atlantic, but there are still concerns about Europe, and financing is hard to obtain.
According to Konstanze Auernheimer of STR Global, demand in 2012 was generally up. However, she noted that occupancy rates in Europe were not really increasing – the impact of major events such as the London Olympics and Euro 2012 football championships only improved room rates.
Without these major stimuli, 2013 looks to be “another year of uncertainty on the back of a year of lackluster trading,” according to Cameron Cartmell, EY’s Head of Hospitality and Leisure. His view was echoed in a poll of delegates: while 83% were optimistic in the short to medium term, 45% expected that “normal” levels of trading would return by 2017, and 48% believed that current trading conditions represent the “new normal” (see chart below).
It’s time for self-help, but where should those efforts be focused? Expansion or refurbishment? Europe or emerging markets? Should owners be investing in new business models and new technology or concentrating on the core business and building customer loyalty? And what help can they expect from banks and investors?
When can we expect to see a return to a more “normal” level of trading in the hotel sector?
Source: Delegate poll results from the EY Hotels Workshop 2013
Nearly half of the delegates believed that current trading conditions represent the "new normal"