A survey of 417 European hotel executives has revealed weak industry confidence and dealt a blow to hopes of recovery this year.
Only two per cent of respondents expect a sustained upturn this year, despite 37 per cent predicting one year ago that 2010 would bring solid growth.
These worse-than-expected results are compounded by fears from over half of hoteliers (55 per cent) that room rates will not return to pre-financial crisis levels until after 2012.
Highlights of DLA Piper’s 2010 European Hospital ity Outlook Survey include:
■ 54 percent of respondents describe their 12-month outlook for the European hospitality industry as “bearish,”down from 84 percent in 2009. Bullishness is up from 5 percent to 27 percent.
■ 45 percent of respondents cite a decline in room rates as having had an adverse impact as opposed to 37 percent mentioning a decline in occupancy.
■ Only 2 percent of respondents expect to see a sustained recovery in the year ahead, but 54 percent see recovery a year away, up from 39 percent a year ago.
■ 68 percent of respondents view the economy and mid-market sectors as the most attractive opportunities for
investors in the next 12 months.
■ 33 percent of respondents anticipate a slight increase in the amount of new-build activity in the coming year,as against 20 and 13 percent foreseeing a slight decrease and a significant decrease respectively.
■ Respondents identified India (24 percent) and China (28 percent) as representing the best opportunities for significant growth for their businesses over the next three years.
■ 33 percent of respondents are seeking “considerably less” advice and guidance from their bankers than 12 months ago.
■ The Eco or Green sector is the most attractive opportunity for only 6 percent of respondents.