Elke Geieregge - European Hotel Sector Trends - EG 04 05 11 F

7/31/2019 Elke Geieregge - European Hotel Sector Trends - EG 04 05 11 F

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in Western and Eastern Europe:

Gaining Momentums

Elke Geieregger HVS London

Hotel Tourism & Leisure Investment Forum Bucharest

3 May

2011


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1. Global/European Tourism Overview

2. Hotel Performance in Europe in 2010 with Focus on CEE3. Hotel Value Trends

4. Outlook for 2011 and Beyond

Overview

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International travel increase forecast at 4% in

2011...

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but Europe not yet back to pre-crisis levels

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2. Hotel Performance in Western and

Eastern Europe 2010: Gaining

Momentum

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RevPAR bottoms out in 2009 Renewed growth in 2010

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Source: STR


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Most markets record RevPAR growth in 2010(Biggest improvers/chasers in Western and Eastern Europe)

Moscow

Tallin

Bratislava

Bucharest

Budapest

Sofia

Prague

- 7 -Source: STR - RevPAR change in Euro

-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

Frankfurt

Munich

Stockholm

Zurich

Athens

Copenhagen

Dublin

Warsaw

r urg


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3. Hotel Values

in Western and

Eastern Europe

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Hotel Transactions Double in 2010

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Q3/Q4 2010: Acceleration of Transactions

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Top and Bottom FivePercentage Change in Hotel Value per Room ()

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Values have bottomed out across Europe

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Western and Eastern Europe: still value

shortfalls compared to peak 2007/10 ()2007 2008 2009 2010 % Change

2010/09

% Change

2010/07

Paris 601,700 566,200 545,900 568,700 4% -5%

London 623,400 479,600 483,900 524,400 8% -16%

Geneva 395,300 463,700 419,300 413,200 -1% 5%

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Rome 453,500 373,500 335,200 341,700 2% -25%

Warsaw 208,800 200,400 164,000 172,500 5% -17%

Bucharest 204,000 160,300 123,600 113,700 -8% -44%

Prague 249,500 197,100 157,000 159,500 2% -36%

Budapest 191,300 158,600 131,900 131,000 -1% -32%

Bratislava 196,600 166,800 135,500 114,000 -16% -42%


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4. Outlook for 2011 and Beyond

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Value increase in 2011/2012 ( Cumulative Forecast)

- 1 5 -Source: HVS London.


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Tourism Outlook

Economic recovery in a

number of EU countries

Impact of Middle Eastunrest

EU outbound travel closer

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to home Increased importance of

BRIC countries

Moderate increase in travel

forecast for Europe


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Performance Outlook

Healthy occupancy growth in 2010 in most markets

Selective average rate growth in 2010, turnaround more

widespread by H2 2011

Crisis has globalised the competition

Value for Money is here to stay

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Increase in business travel and corporate budgets expected

Conference & banqueting business slowly recovering

Adjust hotel business mix to drive rates

Strong cost-cutting measures in 2009/10; cost structuresadapt from crisis mode in 2011


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Investment Outlook

More hotel capital

expenditure/refurbishment

US transaction activity is up

Equity chasing for deals

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Distressed selling?

Continuing shortage of

debt finance, new lending

and development finance


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Elke Geieregger

Associate Director

HVS London Office

+44 20 7878 7747+ 44 79 1224 0964

[email protected]

www.hvs.com

Documents

Elke Geieregge - European Hotel Sector Trends - EG 04 05 11 F