2010 wed presentation
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1/09/10 Hotel positioning in economical downturn 1 Hotels positioning in current economical downturn Cédric Michiels
description
2010 Hotels positioning in current economical downturn
Transcript of 2010 wed presentation
1/09/10 Hotel positioning in economical downturn 1
Hotels positioning in current economical downturn
Cédric Michiels
1/09/10 Hotel positioning in economical downturn 2
Introduction
1. Underlying factors that have influenced hotel industry
2. Current tourism indicators and global outlook on the hotel industry
3. Revenue Managment in economic downturn
4. Ongoing hotel development pipelines
5. International hotel supply & evolution
6. Road map to recovery and emerging markets
7. Innovation
8. Quality control and sustainability
9. Conclusion
Cédric Michiels
1/09/10 Hotel positioning in economical downturn 3
Underlying factors that have influenced hotel industry
l Non-regulated international financial systems
l Currency and petrol fluctuation
l Credit crunch
l Real estate crash
l Reccuring natural disasters
l Terrorism
l Advances in technology
l Saturated hotel markets
l Influenza
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1/09/10 Hotel positioning in economical downturn 4
Underlying factors that have influenced hotel industry
l Credit crunch impact on slowdown in hotel supply growth
l UK sterling / US Dollar devaluation impact on tour operators
l Goverment deficits subdued through currency / petrol fluctuations
l Enviromental impact
l September / March 11th attacks
l 95,000 flights cancelled due to volcanic eruption in April 2010. “Mixed fortune to Hotels”
Iceland Volcanic eruption
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Current tourism indicators and a global outlook on the hotel industry
It is widely accepted that hotel industry is closely aligned with tourism industry. Having a direct affect on occupancy levels.
2009 has been exceptionaly challenging and 2010 is already showing positive prospects of recuperation in terms of tourist arrivals.
International World Tourist Arrivals % Chage
Source: UNWTO
l Recuperation after 14 months of negative results
l Last quarter of 2009/first quarter 2010 indicates increase of 2%
l Of 77 reported countries in the first quarter 2010:
a) 17 are of negative growth
b) 60 show positive growth
of which 24 show double-digit growth
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Current tourism indicators and global outlook on the hotel industry
l Tourism growth has been positive in all world regions in the first quarter of 2010
l Totalling 119 million as compared to 112 million tourist arrivals in 2009
Regions:
- Asia Pacific (+10%)
- Europe & Americas (+3%)
Sub Regions:
- South Asia (+15%)
- South East Asia (+10%)
- North East Asia (+10%)
- North Africa (+8%)
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Revenue management in economic downturn
“One of the keys to success in a down market is not offer across the board price cuts, but to instead focus on particular market segments and distribution channels”. Sheryl Kymes
l How to compete in a price war without suffering long term damage?
Non Price Method Price Method
Reveal Strategic intentions Bundle
Compete on the basis of quality UnBundle
Creat Strategic Partnership Use opaque distributiion channels
Leverage your loyalty program Offer selected rate cuts
Develop additional revenue sources
Develop aditional market segments
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International hotel development pipelines
l Key market developments in Europe pipeline: UK, Germany and Russia
l 172 projects totalling 28,398 rooms expected to open in Europe in 2010
l Key market developments in Middle east pipeline: Dubai, Abu Dhabi and Saudi Arabia
l The Middle East/Africa hotel development pipeline: 468 hotels totalling 127,938 rooms
Chain Scale Existing Supply In Construction Total Active Pipeline*Luxury 61,14 5,31 11,18Upper Upscale 209,22 11,3 18,97Upscale 524,16 14,15 27,47Midscale w/ F&B 464,47 9,59 19,58Midscale w/o F&B 91,54 2,97 8,47Economy 229,51 4,99 14,01Unaffiliated 2,132,805 10,32 18,31Total 3,712,842 58,62 118
l Europe pipeline by Chain Scale segment for May 2010 (number of rooms):
l Middle East/Africa pipeline by Chain Scale segment for May 2010 (number of rooms):
l Source: STR Global construction report 2010
Chain Scale Existing Supply In Construction Total Active Pipeline*Luxury 45,77 16,57 26,82Upper Upscale 69,53 21,82 33,45Upscale 78,74 12,9 19,96Midscale w/ F&B 51,52 2,99 8,47Midscale w/o F&B 3,47 495 1,07Economy 12,53 2,41 5,61Unaffiliated 316,58 14,54 32,57Total 578,15 71,71 127,94
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International hotel development pipelines
Chain Scale Existing Supply In Construction Total Active Pipeline*Luxury 135,71 34,95 46,58Upper Upscale 195,94 45,03 63,78Upscale 241,02 40,32 60,32Midscale w/ F&B 173,3 14,33 21,79Midscale w/o F&B 27,23 2,66 5,91Economy 87,79 4,67 8,77Unaffiliated 1,351,505 32,03 46,66Total 2,212,494 173,98 253,82
Chain Scale Existing Supply In Construction Total Active Pipeline*Luxury 21,43 1,29 2,15Upper Upscale 32,83 2,31 2,69Upscale 85,14 1,54 4,05Midscale w/ F&B 50,73 260 935Midscale w/o F&B 26,22 1,5 4,88Economy 3,45 456 696Unaffiliated 272,2 1,53 1,78Total 492,01 8,88 17,17
l Source: STR Global construtcion Report 2010
l Key market developments in Asia pipeline: China and India.
l The Upper Upscale segment made up 25.1 % , followed by the Upscale segment 23.8 %, the Luxury segment 18.4 % and the Unaffiliated segment 18.4 %.
l Key market developments in Mexico, Dominican Republic and Puerto Rico
l The Caribbean/Mexico hotel development pipeline comprises 133 hotels totaling 17,172 rooms in 2010
Asia/Pacific pipeline by Chain Scale segment for May 2010 (number of rooms):
Caribbean/Mexico pipeline by Chain Scale segment for May 2010 (number of rooms):
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International hotel supply & evolution
l Renewed dynamism in mature market-continents is most apparent!
l “Moderate growth and reduced pipeline developments are anticipated due to the difficulties in obtaining financing”
l Despite global economic challenges, hotel developments continue to progress.
l 432,000 new rooms injected into global supply by both independent hotels and groups
International World Tourist Arrivals
Source: MKG Hospitality 2010
Source: MKG Hospitality 2010
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Source: MKG Hospitality 2010
Source: MKG Hospitality 2010
European hotel supply and evolution
l Clear rise and new trend in Budget and Economy hotels.
l Investors looking for a quick investment return with reduced risk and size of investment.
l Best Western is now Europe’s second largest group, following a 3.3% growth in supply to reach 87,017 rooms.
l NH Hoteles rooms count also jumped over 16% following its recent merger with Hesperia
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Road map to recovery and emerging markets
l Getting back to basics is often a starting point for making improvements. What motivates people? Our values?
l 2010 shows positive signs of recovery on different fronts.
l European average occupancy has been on steady rise in last two quarters.
l Current volatile markets may deviate such pogression if cautious and constant pace is not kept.
l The recovery is lead by Asia with China and India projecting economic growth of 8-10 %
l Brazil, India and Rusia
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Innovation in hospitality
l The source of innovation is people, so motivation is the ingredient.
l Develop stronger technological revenue optimization tools and distribution channels.
l New marketing dimensions exist, designed for greater consumer insight and reaction analysis.
l Incoporate a high degree of social and environmental responsability in the product.
l Use energy saving technology.
New hotel / accomodation concepts
l POD Hotels / POD Beds
l Versatile / mobile modular rooms
l Pixel Hotels
l Dream and Fly
“Innovation is the ability to see change as an opportunity - not a threat”
Qbic Hotels
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Quality control and sustainability l Clear HR policies of a Hotel
determines health and quality of its working members and services it offers.
l Turning intangible product into a tangible one is where quality comes in.
l Ongoing internal assesments of the quality of operation processes and management are essential.
l Periodic recycling training courses to re inforce quality standards.
l Reduce enviromental impact through, eco purchasing, waste management, energy consumption.
Adding luxury hospitality to the birdwatching experience
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Conclusion
l The current world economic dowturn is at a turning point, the slowdown has allowed the tourism and hotel industry to regain confidence.
l Positive prospects of recuperation are underway in the hotel industry. l Perception has to be aligned with positioning objectives.
l There is a clear shift in demand and supply with regards to development of budget and economy accomodation in the Eurpean continent
l Human capital will be stake holders in reassurring the continuity and improvements in the hotel industry.
l European hotel industry / training instituitions is a reference point for all emerging markets.
l Stronger focus on management for natural and human resources.
Cédric Michiels
