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Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
Pandox Upgrade - No 2 2010 (Eng)
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Pandox Upgrade - No 2 2010 (Eng)

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Eventful summer in Europe, Link between happy customers and financial results etc

Eventful summer in Europe, Link between happy customers and financial results etc

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  • 1. Up GradeM A R K E T I N F O R M AT I O N F R O M PA N D O X Scandinavia’s biggest event in 20118p . The edited truth? 5p . Link between happy customers and financial results4p . Eventful summer in Europe S pot l i g h t trends | g u ests at t h e h eart #22010
  • 2. The wheels are spinning faster and faster. Changes on the hotel market are quicker, more dramatic and harder to analyze. And there have been several examples of this over the past two years. In the latest cyclical downturn that hit the hotel sector in late-2008, the market was like a runaway train without a driver. Volumes and prices dropped almost simultaneously and the time-lag between when different geogra- phical markets were affected was shorter than previously. Moreover, the downturn was deeper than in previous recessions, triggering panic among investors. And now we’re seeing the reverse. The recovery is quicker and steeper than in historical comparisons. So what’s the reason for this stronger dynamic? What new drivers have emerged and how are they interacting? We will be overlooking these issues during our next Hotel Market Day, which is held on 25 November, and as is customary, at the Hilton Stockholm Slussen. The right acquisition – at the right time On 24 August, Pandox reached an agreement to acquire Norgani, thus establishing one of Europe’s leading players on the hotel property market in terms of geographical coverage, number of hotels, brands and size. Several sector colleagues have already con- tacted me, saying that despite its SEK 10 billion size, they weren’t surprised by this deal. On the contrary, several wondered why we had taken so long to reach an agreement. The companies’ busi- ness models are similar—they operate on the same market and both concentrate on Scandina- via. Although this is obviously correct, what seems logical on paper doesn’t always work in the business world. Let me state two reasons why we did the deal. The first is that we think this is good timing. When you’re doing an acquisition of this scale, you need to take a positive view of the macroeconomic outlook. We think that we’ll generally see increased demand in the hotel sector over the coming years. Also, our overall view is that the exogenous risks probably haven’t reduced, but they are identified and priced in. The second reason is that we think that Pandox’s organisation and companies can add value and develop the hotels in Norgani’s portfolio. Partly by us having the financial resources to invest in hotels and the experience to execute develop- ment projects. The strategy is to identify the devel- opment potential of each hotel in close partnership with their operators and to enhance the hotels’ market positioning with the aid of contemporary concepts, product offerings, and through new services concepts. This is easier to say than do. In total, it will require investments of over SEK 1.5 bn—which is really exciting. Apart from the Norgani acquisition, in the past quarter we also acquired Park Inn Solna and the Brussels Hilton. The Park Inn is located in Solna, north of Stockholm, and embedded in a major shopping mall. The Park Inn is in very good condi- tion and has been Solna’s best urban hotel for many years, previously with the somewhat outlandish name Flamingo. Pandox thinks that the segment this hotel operates in will remain stable, not notably affected by the new capacity planned in the area. The Brussels Hilton is an amazing acquisition. The hotel is in a prime location on Boulevard Waterloo close to the prime street Avenue Louise. This hotel has 432 rooms on 26 floors and several conference floors. The best feature of this acquisi- tion is the hotel’s potential. It needs an upgrade and a new, contemporary range of products and services. We expect this development package to take at least three years. Anyone who’s interested can keep up to date on the process via Upgrade and other Pandox events. Public event of the year After the Hotel Market Day on 25 November, it’s less than 50 days to the handball world champion- ship, the biggest event in Scandinavia in 2011. This mega-event is expected to attract some 2 billion viewers on TV, 1,600 journalists will be reporting on it, and 100 TV channels are broadcasting matches. I’m not entirely certain that everyone has under- stood the scale of the Handball World Champion- ship, and what an honour it is for Sweden to host it. So regardless of whether you follow handball or not, it should almost be compulsory for everyone to keep their fingers crossed for the Swedish team—everyone should be praying that none of our players get injured or ill. So what are Sweden’s chances? According to managers Staffan Olsson and Ola Lindgren, we should qualify for the main round. From then on, anything can happen…realistically, Sweden may be one of the five or six top teams. The experts predict that France, Croatia or Denmark will win. But regardless of who finally becomes the winner, we can look forward to some great entertainment at the top level. Find out more at www.hand- ball2011.com and buy tickets from www.ticnet.se. Yours sincerely, Anders Nissen PS. The Swedish football league gold medal goes to Skåne, as if that’s a surprise! Good things come to those who wait… Just a word Address: Pandox AB P.O Box 5364 SE-102 49 Stockholm, Sweden Tel.: +46 (0) 8 506 205 50 Fax: +46 (0) 8 506 205 70 E-mail: pandox@pandox.com Visiting address: Grev Turegatan 44, Stockholm Graphic design and production: Hallvarsson & Halvarsson Photos: Ulf Blomberg, Peter Hoelstad, Getty Images, Shutterstock, et al. Printing: TMG Sthlm, November 2010. May be reprinted only with the permission of Pandox. Cover photo: Hotel Indigo, London Tower Hill. Find out more under News on page 3. Upgrade can be ordered from Pandox or read at www.pandox.com Pandox Upgrade. Market information from Pandox – published approximately three times a year. Editors: Anders Nissen, Anette Paulsson, Annelie Sundström Aguilar 2 MARKET INFORMATION FROM PANDOX
  • 3. Hotel World May Park Plaza Hotels acquires Holiday Inn Amsterdam Schiphol for EUR 30 million. This hotel has 342 rooms and will be renamed Park Plaza Amsterdam Airport. The budget chain Travelodge invests EUR 62.4 million in the development of 13 new hotels. Four of these will be in London, the rest throughout Europe. This will result in an extra 1,224 rooms in total. June Starwood Hotels & Resorts opens its 244-room Westin Hamburg Hotel through a joint venture. This hotel will be part of the Elbe Philharmonic Hall com- plex currently being built in Hamburg. This will be the city’s first Westin hotel. Rezidor Hotel Group and Carlson Hospitality Group sell their luxury chain Regent to the Taiwan-based Formosa International Hotels Corporation for a total of EUR 9.5 million. Hilton opens two hotels in Poland. Doubletree by Hilton Warsaw Confe- rence Centre and Spa, with 347 rooms, will be opening in Warsaw in Q2 of 2012, while Doubletree by Hilton Lódz will be opening in the city of Lódz in Q4 of 2012. July Starwood Capital and London & Regional join forces to buy London’s Cumberland Hotel, with its 1, 019 rooms. The hotel is being sold by the Royal Bank of Scotland, and the selling price is rumoured to be around EUR 215 million. Gresham Hotels sells its 188-room Park Inn Hyde Park for EUR 35 million to an unknown buyer. Hotel Indigo London Tower Hill, the second Indigo hotel in London, opens. The property is owned by the Thai Square Group and the hotel is sited in converted offices. Budget chain Travelodge enters into a contract relating to the running of 52 Innkeeper’s Lodges. This increases the Travelodge portfolio to 452 hotels in the United Kingdom, Ireland and Spain. The Golden Tulip Hospitality Group enters into a franchise contract for a new hotel in Amsterdam. The former Hotel Terminus is renovated and con- verted into the Tulip Inn Amsterdam Centre, with 110 rooms. Courtyard by Marriott Bremen beco- mes Marriott International’s first hotel in Bremen. This hotel has 155 rooms and is situated in an old railway building. Starman Hotels has sold Le Meridien Piccadilly in London to Host Hotels & Resorts. The selling price for this 266- room hotel is EUR 64 million. August Hilton Worldwide launches a new identity for its biggest brand and adds “& Resorts” to its name. Its logo is upda- ted with a new blue tone and a new font. The new identity for Hilton Hotels & Resorts aims to project a more holistic vision of the brand’s global portfolio. Bank of China makes its first invest- ment in a hotel in the United Kingdom and buys InterContinental Queen Anne’s Chambers, with its 254 rooms. This hotel will be opening in the latter part of 2011, in time for the Olympics in London. Pandox enters into an agreement concerning the acquisition of Norgani Hotels. The acquisition includes 73 hotels and one congress facility in Swe- den, Finland, Norway and Denmark, and the acquisition price is SEK 9.9 billion. Malta-based Corinthia Hotels plans to open its ninth hotel in London. This hotel will have 294 rooms and is mooted for completion in 2001. September Starwood Hotels & Resorts opens its first Aloft in Europe. Aloft Brussels Schuman, with 147 rooms, is in the EU district in Brussels and is Starwood’s fifth hotel in the city. Pandox buys the 432-room Brussels Hilton on Boulevard Waterloo in the heart of Brussels. This is the company’s sixth hotel in Brussels, and with another two hotels in Antwerp Pandox now has a total of eight hotels in Belgium. Accor enters into three franchise agreements in London. These agree- ments relate to Mercure London Bloomsbury, with 109 rooms, and two All Seasons hotels with 100 and 139 rooms respectively. InterContinental Hotels enters into a contract relating to 2,375 new hotel rooms in the United Kingdom, Spain, Portugal, Germany, France, Russia and Turkey. These new hotels include a Hotel Indigo, a Staybridge Suites, a Crowne Plaza, four Holiday Inns and nine Holiday Inn Express hotels. These hotels are estimated to open between 2011 and 2014. Richard Branson is entering the hotel industry and launching Virgin Hotels, a four-star lifestyle hotel. His aim is to have 25 hotels by 2017. The initial launch will take place in major cities in North America. Pandox enters into a contract concerning the acquisition of Park Inn Solna, north of Stockholm. This hotel has 247 rooms and is located in the Solna Centrum shopping centre. October Westmount Hospitality enters into a purchase agreement with Strategic Hotels & Resorts concerning the acquisition of InterContinental Prague, with its 327 rooms. Sol Meliá opens its second hotel in London. This Spanish hotel chain has acquired City Bank London for EUR 133 million and the property is now being converted into a hotel. News MARKET INFORMATION FROM PANDOX 3
  • 4. Value a smile With a tough year behind us and anything but an easy and straightforward recovery to come, the hotel industry has to keep its strength up. A recent survey shows there are links between happy customers and financial results, and so there we have it, in black and white: we can’t rest on our laurels if we want success. Industry study During times of economic downturn, we’re kept busy because there’s more competition for the declining numbers of guests. But when the signs of growth can be perceived, we can’t just sit back and relax. This is the point at which hotels have to both retain the customers they managed to entice in during the downturn while at the same time grabbing their fair share of the increasing demand. And throughout all this, we have to make sure our customers are all happy. Consistent service pays off Happy customers don’t just come about because a hotel is doing one thing right. The only time really happy customers come about is when a number of things are handled consistently well. Manuals, systems and methods which are complied with, followed up and rewarded are a must for any hotel that wants to do more than just survive during an economic downturn. These are also the hotels that are champing at the bit to progress when the tide turns and that are able to make the most of the upswing. J.D. Power and Associates have carried out a customer satisfaction survey in the hotel industry for the 14th successive year. This study, which was carried out over a period of a year and involved more than 53 000 guests, proves that there is a link between happy customers and financial results. Above all, there are four important areas that are fundamental to the economic success of the business. If customers are happy in all four cate- gories, there’s more likelihood of them buying more in restaurants, spas, mini bars and suchlike. First impressions count The most important aspect of customers’ overall impressions is to make sure the booking is correct, followed by straightforward check-in taking less than 5 minutes. Making sure their stay is com- pletely without problems comes in third place, and making sure their visit ends with a correct invoice is fourth. This study also shows the monetary effect of different levels of satisfaction. While a customer overwhelmed with pleasure will spend 48 dollars more during a successful hotel stay, a happy customer will spend just 40 dollars more, and an indifferent customer will spend just 32 dollars more. But not only will happier customers spend more money there and then; they’ll also spend even more during subsequent visits! During return visits, the customer overwhelmed with pleasure will spend 58 dollars more, while the indifferent customer will spend just 38 dollars more. Check the booking process The function and quality of the booking channel are significant as booking and check-in are of most importance to customers. Nowadays, more and 4 MARKET INFORMATION FROM PANDOX
  • 5. The edited truth? The market on the market New economic patterns mean huge uncertainty. A strong reco- very from a deep recession and a good first six months of the year mean that some people are having problems controling their enthusi- asm. But really, where are we at? A double-dip recession and poor credit risks have been hot topics for more than six months now. Has the economy really reached its lowest point and do we dare believe the recovery is upon us, or could there be another dip? When will the banks be forced to sell their hotels, or will they stubbornly hang onto them until they know the outcome of the prevailing financial unrest? The right time is NOW Jim Butler at HotelLawBlog.com is sure in any case that the market has reached the bottom, and he wants to help get things moving again. In capital letters, he declares that “NOW could be the best time for lending to the hotel industry since the early 1990s”. He reckons that anyone waiting a year or two to get into the industry will risk missing the best business opportunities. At the bottom of the dip, parties that have been burnt in the crash and weak opponents reluc- tantly agree to tougher loan demands, and profit- able contracts can be entered into. We hardly need ask for whom. Anyway, it looks as though there are more peo- ple who are thinking like Jim. The appetite for deals has definitely increased over the past six months, as demonstrated by the figures for the global transactions, which rose by 45 per cent over the period. The biggest increase has been noted in the Americas, which during the first six months of the year exceeded the transaction vol- ume for the corresponding period in 2009, ending up at USD 2.5 billion dollar. This is the first time since the fourth of 2007 that the transaction vol- ume in the Americas has been in line with the EMEA region. Europe Middle East Africa rose by 8 per cent over the period to USD 2.2 billion. The globally financed funds are starting to recover after having rested in 2009. And we’ve also seen a gradual increase in portfolio transac- tions, which over the first six months of the year represented a third of all transactions, compared with just 10 per cent a year ago. The second six months of the year has contin- ued to be strong, and in October Jones Lang LaSalle increased its full-year forecast for hotel transactions in the USA by more than 40 per cent. Splendid celebrations Vasant Prabhu, Head of Finance at Starwood, believes the market won’t really get going again for a few more years. A couple of hotels here and there will have new owners, but he reckons the really major portfolio transactions will take place only once the global economy has healed. Despite this cautious believe, Prabhu and his col- leagues are acting in the true spirit of the 1980s. To celebrate the opening of the company’s latest W hotel in New York, its managers met up at the New York Stock Exchange to participate in the opening of the stock exchange. Female models wandered about the trading floor and handed out biscuits, snacks and W-shaped cufflinks to the brokers. High-price hotels in the pipeline We live in strange times. A decline classed as one of the worst in history was followed by a record recovery. Some people believe the recovery has gone so quickly that the recession has already been forgotten. So who’s doing things right, and who’s doing them wrong? Both Jim and Vasant seem to believe we’re in for the ride of our lives, anyway. And if we look at the hotels in the pipeline in Europe, it seems that more people are expect- ing the upswing to happen any time now. Of all the future hotel projects in Europe, 40 per cent involve high-price hotels. But are things really quite that easy? The world we live in now is very different to 20 years ago. The global economy has surprised us more than once, and we can no longer rely on historical trends. But never before have we been in a situation in which the whole world has been in such financial trouble simultaneously. Globally artificial low inter- est rates, tax subsidies and public investments are the cause of the present patterns. So what’s going to happen once the effects of these stimulants has subsided, and what will happen next when all the assistance gradually starts to be withdrawn? Satisfied customers spend more money than unhappy ones. Increase your sales by offering these priority measures. Always have a smile on your face! Service at Hotel Berlin, Berlin, an independent hotel owned and operated by Pandox. Cornelia Kausch is the manager of the hotel. more people are booking hotel rooms online and these numbers are increasing year on year. Customers booking via hotels’ own websites appear to have a better overall impression of their hotel stays than customers who book via inde- pendent distribution channels. To make customers happy and so achieve good financial results, therefore, we need to invest time and money to reach customers as early on as pos- sible. The more elements of the process that the hotel can control, the better. The function and attraction of websites is more important than you might think. This is where the journey to enhanced profits begins! Increase your profits! 1. Correct bookings 2. Check-in within 5 minutes 3. Problem-free stay 4. Flawless invoice MARKET INFORMATION FROM PANDOX 5 Transaction volumes USD billions 0 1 2 3 4 5 6 7 Jan–Jun 2010Jan–Jun 2009 Americas 1.0 Americas 2.5 EMEA 2.2 EMEA 2.0 Asia Pacific 1.4 Asia Pacific 2.5 Source: Jones Lang LaSalle Hotels Reality or not – transactions have nevertheless increased massively over the first six months of 2010.
  • 6. Demand increasing on a broad front. The recovery is well under way in both the US and Europe. Many cities in Europe have also been given a helping hand by a number of events over the summer, which in turn have led to record figures. The American hotel market has increased its occu- pancy by more than 5 per cent over the first three quarters of the year, while the price remains almost 1 per cent below last year. The luxury segment is seeing the biggest increase, mainly in terms of occu- pancy. The average price in this group is just about 1 per cent higher than in 2009. In terms of pricing, the big cities have seen the best results. If we look at New York overall, occupancy and price have increased with about 7 per cent respect- tively. And for YTD September the city is around 15 per cent above 2009 levels. In September alone, on the other hand, the price was up no less than 12 per cent while occupancy was up by just 1 per cent. Fashion setting records in London The growth has really made progress in Europe as well. The summer in particular has been especially strong in many locations. June is a traditionally strong month in London, partly thanks to the com- mercially strong Wimbledon. The Farnborough Air Show, which is held every two years, also had its part to play. And in the third quarter both occu- pancy and the average price were there for the tak- ing at London hotels during London Fashion Week and the London Design Festival. In July, London saw 94 per cent occupancy, which according to research company TRI is the highest level seen for any one city in Europe over the decade they’ve been analysing the European hotel market. The competetive group includes no Strong event market in Europe Record figures over the summer Focus on the market fewer than 50 hotels, which indicates strength over a broad front. Growth has continued, and in Sep- tember the city was seeing a growth in RevPAR of 18 per cent. RevPAR is at a high level for YTD Sep- tember as well, closing 12 per cent above the pre- vious year, with the average price up by almost 9 per cent and occupancy up 3 per cent. Strength in the leisure segment The strength lies in the leisure segment above all, thanks to major events. Overall travel to the United Kingdom was down, and over the twelve months to June 2010 business travel was down 5 per cent while holiday travel was up 2 per cent. Paris was also given a boost by demand in the leisure segment but is having difficulties increasing its prices in the business segment. In June, the French Open helped to create interest in the city, and the summer months ended with 11 per cent growth on last year thanks to slightly stronger growth in occupancy than average price. July was strong too, while August was less so. After a very strong September, the city is now 10 per cent above 2009 levels for YTD thanks to growth of 4 per cent in occupancy and 6 per cent in average price. The parade of events is continuing throughout Europe. Berlin and Amsterdam are other cities which have strong events to thank for their growth over the summer. Amsterdam saw the classical music festival Grachtenfestival, the Uitmarkt sum- mer festival and Gay Pride – all in August. The number of visitors for these events amounted to 45,000, 500,000 and 500,000 respectively, result- ing in occupancy increasing by 13 per cent and the price increasing by 20 per cent over the month. September has continued strongly as well, with a RevPAR increase of 20 per cent. For YTD Sep- tember, the city is up 13 per cent on the previous 6 MARKET INFORMATION FROM PANDOX The Eden Rembrandt Square Hotel was one of the hotels recommended on the Amsterdam Gay Pride website. The city hosted three major events in August, and with its 500,000 visitors Amsterdam Gay Pride was one of the biggest.
  • 7. year, of which there’s been a 9 per cent increase in occupancy. The Carnival of Cultures took place in Berlin in May, followed by the Berlin Gay and Lesbian Festival and Gay Pride in June. RevPAR was up 23 per cent in June and, and the first six months of the year ended 12 per cent up on 2009. Berlin has seen a 12 per cent increase at YTD September compared with the previous year. Good third quarter in Stockholm Scandinavia is trailing the major European cities to an extent, but the increase in demand is now showing signs of taking effect in Stockholm. Travel to and from Stockholm has increased massively. Traveller numbers for Arlanda Airport grew with more then 10 per cent in September, for the third month in a row. International travel saw the biggest growth (16 per cent) in September, compared with a 10 per cent increase in domestic travel. The hotel market at Arlanda airport was up 67 per cent in August, confirming the increase in activity at the airport. The market group has seen a 22 per cent increase at YTD September compared with the previous year. Occupancy is up by around 15 per cent, while price is up by more than 6 per cent. In the City of Stockholm, RevPAR is up 11 per cent for YTD September. This includes both the wedding of Crown Princess Victoria – which itself wasn’t the boost the market had been hoping for – and a congress for cardiologists. Congresses and conferences carried on trickling into the Swedish capital in September. Gothenburg and Malmö waiting for growth The City of Gothenburg group also saw an increase in the summer thanks to plenty of con- gresses. The Gothia Cup, Partille Cup and 2010 World Masters Swimming Championships brought sporty guests to Gothenburg in summer. Pink also held a major show in the city in July. Despite all the big attractions, the City of Gothenburg group is continuing on a par with YTD September. Things look even worse for Malmö’s four star city group. RevPAR is down almost 9 per cent on last year for the January to September period. Occupancy is down 5 per cent, price is down 4 per cent. The Municipality group is losing more in terms of occupancy than average price. MARKET INFORMATION FROM PANDOX 7 Hyatts Andaz on Liverpool Street in London was one of the supporters of the London Design Festival and did well in late summer. A strong summer gave New York a boost. The city is up 15 per cent at YTD September. The city hosted London Fashion Week and the London Design Festival in summer, as well as an annual airshow. London is up 12 per cent at YTD September. Three major festivals visited by over a million people gave Amsterdam a boost, and the city is up 13 per cent at YTD September. Berlin saw a strong early summer but was weaker in August. The city is up 12 per cent at YTD September. The French Open brought people to Paris, and the city was up 10 per cent at YTD September. –10 0 10 20 30 40 SepAugJulJunMayAprMarFebJan –10 0 10 20 30 40 SepAugJulJunMajAprMarFebJan –10 0 10 20 30 40 SepAugJulJunMayAprMarFebJan NY London Amstersdam, Berlin, Paris ParisBerlinAmsterdam % % % New York, RevPAR 2010 London, RevPAR 2010 Amsterdam, Berlin, Paris, RevPAR 2010
  • 8. Sweden PEAK UmeåDecline Jönköping, Lund, Malmö Growth Karlstad, Uppsala, Stockholm, Stockholm 5 Levelling out Sundsvall Lund is continuing its losses on a rolling twelve- month basis. August was strong, as in most places, but its overall trend is downwards. After a strong summer, Helsingborg is 2 per cent above the RevPAR for 2009 at YTD September. Gothenburg is starting to show signs of recovery, and a positive RevPAR was seen in five out of the first eight months of the year. Karlstad is picking up, and occupancy in particular is on the increase. By YTD September, the price was down 0.3 per cent, while occupancy was up by almost 7 per cent. Things are tougher in Malmö, and both average price and occupancy are down. Despite an increase of 15 per cent in August, RevPAR for YTD September is almost 4 per cent down on last year. Occupancy is down by about 4 per cent, while price is down by just under 1 per cent. In the five- star segment in Stockholm, occupancy and price are increasing to the same extent. Strong events and conferences have affected the city and the segment, and these activity levels are continuing in the autumn. Market overview, September 2010 Decreasing decline Gothenburg, Luleå, Helsingborg Scandinavia’s biggest event in 2011 – a multicultural festival! In January 2011, most hotels in Central and Southern Sweden will be occupied by 24 handball teams from all over the world. Spon- sors, the media and handball lovers will also be filling hotels all over Southern Sweden. The World Handball Championships will be taking place from 13 to 30 January 2011, and one of the aims of the championship is to create a multicultural festival which extends far beyond the bounds of the handball arenas. Tickets are available from www.ticnet.se. They’re selling fast, so hurry up and book now! The market barometer shows where selected cities lie in the business cycle. Assessment is based on analyses of each location. Allowance is made for macroeconomic developments, developments within the hotel industry, the business cycle, progress in the hotel market and how well developed and liq- uid the hotel property market is. Note that hotel business cycles are similar in pattern but different in time. Pandox market barometer 8 MARKET INFORMATION FROM PANDOX
  • 9. PEAK – Decline Oslo Growth London, Berlin, Amsterdam, Paris Levelling out Brussels International London has seen good growth and at YTD Sep- tember the city was 12 per cent up on last year with a 9 per cent increase in price. Berlin has also seen three good quarters, and like London it has closed at 12 per cent up. Here, too, the growth in price is approaching 9 per cent. Occupancy has started to recover in Helsinki, but the price is still falling. The city is in a positive position at YTD, but it is still seeing a negative on a rolling 12-month basis, including a fall in average price of close to 6 per cent compared with last year. In Copenhagen, occupancy has started to recover but price has seen a severe drop. At YTD September, the price is 11 per cent below the level for 2009. Prague stands at a RevPAR down 2.5 per cent at YTD September, despite a fantastic August which closed 23 per cent up on 2009. This entire downturn is due to a price loss; occupancy is up by more than 9 per cent. A fantastic event market in Amsterdam is helping the recovery. The city closed at almost 13 per cent growth at YTD September, with an increase in both average price and occupancy. Decreasing decline Helsinki, Copenhagen, Prag, Vienna Defining the various facets of the hotel business cycle: Growth Occupancy is rising relatively rapidly and prices are starting to rise. High potential and low risk. Peak Occupancy rising/levelling off and prices increasing rapidly. Good potential and low risk gradually rising to high risk. Decline Occupancy and prices decreasing due to lower demand or overcapacity. Low potential and high risk. Decreasing decline Decreasing volumes becoming more stable – continued pressure on prices. Some potential and high risk. Levelling out Occupancy rising with unchanged prices. High potential and decreasing risk. MARKET INFORMATION FROM PANDOX 9
  • 10. Know your gue for success The lifestyles and values of guests characterise the design at any successful hotel. At least, that’s how it is if you believe the most success- ful hotel designers of our time. Focus on guests, not the hotel. To create a successful hotel, you have to keep tabs on your customers and be familiar with your sur- roundings. Knowing the big stuff and the small details alike as regards what the city has to offer, what today’s travellers want to do and how they behave. So what defines your target group? We used to refer to demographics. You analysed your customers and pigeonholed them depending on their sex, jobs and interests and then created hotels to suit your customer type. Nowadays, psy- chographics is used to define target groups. This focuses on customers’ behaviour and psychologi- cal characteristics instead by charting factors such as lifestyles, values and personalities. This approach is particularly important for lifestyle and boutique hotels which attract guests for reasons other than their geographical locations and the range of services. One good example of this is the California- based hotel chain Joie de Vivre, which has opted to target the readership of a popular specialist maga- zine. Readers of the legendary Rolling Stone Magazine are the target group for this chain’s Phoenix hotel in San Francisco. Lifestyle – a rebellion against the norm The design trend, normally referred to as lifestyle, design or boutique hotels, came into being in 1981 as a reaction against the gigantic, standardised hotels that were the norm in those days. The first hotels came into being at about the same time in both San Francisco and London, pioneered by Ian Schrager and Philippe Starck. Australia’s most popular hotel designer, Joseph Pang, who’s worked in the industry for 30 years, says that when he started his career, the brand was by far the most important consideration when creating a design, and rooms really had to look like hotel rooms. “Nowadays modern hotel rooms feel more homely; they’re familiar, they’re restful, you can feel comfortable there and you get that feeling as soon as you check in because everything feels homely,” says Joseph Pang. Schrager also emphasises the importance of feeling at home when he describes one of his current projects, EDITION Hotels, which he’s working on together with Marriott. But do we really want to feel at home when we’re staying at a hotel? And do we actually feel at home? The stressed business traveller who’s left the family at home can sit undisturbed and work from an elegant designer sofa in a “living room” 100 sq m in size. She sits with a glass of full-bodied red wine in one hand, one eye on the TV and a laptop on her knee. In the hotel room, she finds fresh flowers in an unnecessarily large vase, guaranteed to be breakable, and bathroom with strong, pale marble that shows every little hair or speck of dust. Is that the way things are at home? No: it’s a dream, vision, an escape, a form of compensation for the pressure we live under. Hotels guests at The Phoenix in San Francisco are all readers of Rolling Stone Magazine. Trends: THE GUEST AT THE HEART 10 MARKET INFORMATION FROM PANDOX
  • 11. … 100 per cent occupancy for more than a month is possible! The Amari Boulevard Bangkok, with its 309 rooms, had 100 per cent occupancy for 35 days in a row last summer. Of course, the director of the hotel is very pleased about this and hopes it’s a sign that tourism is making a comeback. …you can spend a night in London for £9! Hotel chain Tune Hotels is using the business model applied by the cut-price airlines, with low basic prices and supplementary charges for optional extras. You can have your room cleaned for £7.50, and getting your hair blow- dried in the morning will cost you £2 extra. …a housekeeper earned more than 7,000 dollars in a day! A group of missionaries accidentally left 6,000 dollars in a room at Miami International Airport Hotel, and housekeeper Mydil found it. She handed it in to her boss straight away and he was able to return it. This impressed people so much that they sent loads of money to the hotel and its housekeeper. By the end of the day, Mydil had been given 7,535 dollars to thank her for her honesty. …bad smells don’t bother high-price guests. A survey shows that guests at high-price hotels most often complain about poor check-in procedures and noise that disturbs them. In the economy segment, people complain most about cleaning and bad smells. sts When Joseph Pang designs a hotel, he wants it to feel like home. Above, his work on the InterContinental Sydney. Shaping the times in which we live Fashion designer Yves Saint Laurent was a true master when it came interpreting the world about us and creating fashion that reflected social and cultural changes. One clear example of this was when he created a trouser suit – for women. Jeffrey Ornstein, founder and CEO of J/Brice Design International, views Laurent as a role model in the art of reading people and the times in which we live. “In the hotel industry, we have to learn how to read people and we have to focus on them, not on the hotel.” The Burj al Arab in Dubai is proof that it’s possible to make as much of an impression in time as Yves Saint Laurent made with that trouser suit for women. The sail-shaped building of the Burj al Arab placed Dubai firmly on the map. The country has almost become a brand in itself, with the silhouette of the hotel as a logo, the modern- day answer to the Eiffel Tower. “We have the opportunity to interpret the cultural winds of change and create guest experiences that are in line with our times and cre- ate memorable hotels for the future,” says Jeffrey Ornstein, who’s also in favour of us working to surpass customers’ normal everyday lives. A home fit for a king Ornstein is currently working on a design for a new property in Saudi Arabia. This hotel will be pitched to customers including everyone from top French models, powerful cattle owners from Uruguay and managing directors from major American corporations. It’ll be inter- esting to see what design Ornstein’s psychographic analysis turns up, particularly because he wants to create an experience that sur- passes hotel guests’ everyday lives - in this case elegant apart- ments, magnificent properties and private jets. These guests have to be simply captivated by their surroundings! Didyouknow... A little bit of everything from various corners of the hotel world MARKET INFORMATION FROM PANDOX 11
  • 12. Facelift for Radisson Blu Hotel Malmö Around SEK 80 million has been spent on giving the Radisson Blu Hotel Malmö a new face. This hotel now boasts two completely new room styles; its Natural Cool standard rooms and its New York Mansion busi- ness class rooms. This Malmö hotel is one of the first in the chain to offer these room concepts, and soon guests all over the world will be able to stay at other Radisson Blu hotels in conditions that are every bit as comfortable and as stylish. One unique aspect of the hotel in Malmö is that all 229 of its rooms are still 43 sq m in size; rooms that other hotels would call suites. The Radisson Blu Hotel Malmö is one of the first hotels in the chain to launch the new room concept. Minister breaks a shell to open Pelican Bay’s Canal House Hubert Ingraham, the Prime Minister of the Bahamas himself, officially opened the Canal House for Pelican Bay by donning safety goggles and broke a large shell with a sledgehammer. Hotel manager Magnus Alnebeck gave an opening speech, saying: ““We are delighted to open the Canal House and introduce a totally new product in design and features to our community. We want every business person to know that Pelican Bay is the hotel of choice when visiting, meeting or maybe being married on Grand Bahama Island.” The opening of the new conference facility was attended by many influential people in the Bahamas and received a lot of media attention. Hubert Ingraham, Prime Minister of the Bahamas, wore safety goggles to break a shell with a sledgehammer, and then he declared the Canal House open. “Bien Belge Living Lounge” at Hilton Brussels City Hilton Brussels City has recently renovated its lobby and restaurant, creating more of a boutique feel with a cosy atmosphere. The new “Bien Belge Living Lounge” restaurant and wine bar offers Belgian specialities. The newly renovated “Bien Belge Living Lounge” restaurant at Hilton Brussels City. Colourful in Berlin Hotel Berlin, Berlin, one of the leading event hotels in the city, knows just how to attract attention. During the Berlin festival of light, the hotel produced a colourful light show on the front of the hotel. This lighting system is an example of how the hotel can be converted into various forms based on colour, theme or brand. “This unique concept means we’re able to provide our customers with custom solutions to under- pin their events and profiling – the options are pretty much boundless when we use colours, light, film, photos, logos or other graphics,” says hotel manager Cornelia Kausch. Pandox has completed its acquisition of hotel property company Norgani AS since its terms for the deals were met. With this acquisition, Pandox has created one of the top hotel property companies in Europe, with a portfolio that includes 121 hotels and 25,000 rooms in ten countries. Norgani acquisition complete Pandox news News from the world of Pandox Scandic Grand Marina, Helsinki. 12 MARKET INFORMATION FROM PANDOX

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