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2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
2010 wed  presentation
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2010 wed presentation

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2010 Hotels positioning in current economical downturn

2010 Hotels positioning in current economical downturn

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  • 1. Hotels positioning in current economical downturn1/09/10 Hotel positioning in economical downturn Cédric Michiels 1
  • 2. Introduction1. Underlying factors that have influenced hotel industry2. Current tourism indicators and global outlook on the hotel industry3. Revenue Managment in economic downturn4. Ongoing hotel development pipelines5. International hotel supply & evolution6. Road map to recovery and emerging markets7. Innovation8. Quality control and sustainability9. Conclusion1/09/10 Hotel positioning in economical downturn Cédric Michiels 2
  • 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  Influenza1/09/10 Hotel positioning in economical downturn Cédric Michiels 3
  • 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 Iceland Volcanic eruption l  95,000 flights cancelled due to volcanic eruption in April 2010. “Mixed fortune to Hotels”1/09/10 Hotel positioning in economical downturn Cédric Michiels 4
  • 5. 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 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 Source: UNWTO1/09/10 Hotel positioning in economical downturn Cédric Michiels 5
  • 6. Current tourism indicators and global outlook on the hotel industryl  Tourism growth has been positive in all world regions in the first quarter of 2010l  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%)‫‏‬1/09/10 Hotel positioning in economical downturn Cédric Michiels 6
  • 7. 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 Kymesl  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 1/09/10 Hotel positioning in economical downturn Cédric Michiels 7
  • 8. International hotel development pipelines Europe pipeline by Chain Scale segment for May 2010 (number of rooms): l  Chain Scale Existing Supply In Construction Total Active Pipeline* Luxury 61,14 5,31 11,18 l  Key market developments in Europe Upper Upscale 209,22 11,3 18,97 Upscale 524,16 14,15 27,47 pipeline: UK, Germany and Russia Midscale w/ F&B 464,47 9,59 19,58 Midscale w/o F&B 91,54 2,97 8,47 l  172 projects totalling 28,398 Economy 229,51 4,99 14,01 Unaffiliated 2,132,805 10,32 18,31 rooms expected to open in Europe Total 3,712,842 58,62 118 in 2010 Middle East/Africa pipeline by Chain Scale segment for May 2010 (numberl of rooms): Chain Scale Existing Supply In Construction Total Active Pipeline* Luxury 45,77 16,57 26,82 l  Key market developments in Upper Upscale 69,53 21,82 33,45 Upscale 78,74 12,9 19,96 Middle east pipeline: Dubai, Abu Midscale w/ F&B 51,52 2,99 8,47 Dhabi and Saudi Arabia Midscale w/o F&B 3,47 495 1,07 Economy 12,53 2,41 5,61 Unaffiliated 316,58 14,54 32,57 l  The Middle East/Africa hotel Total 578,15 71,71 127,94 development pipeline: 468 hotels Source: STR Global construction report l  totalling 127,938 rooms 2010 1/09/10 Hotel positioning in economical downturn Cédric Michiels 8
  • 9. International hotel development pipelines Asia/Pacific pipeline by Chain Scale segment for May 2010 (number of rooms): Chain Scale Existing Supply In Construction Total Active Pipeline* l  Key market developments in Asia Luxury Upper Upscale 135,71 195,94 34,95 45,03 46,58 63,78 pipeline: China and India. Upscale 241,02 40,32 60,32 Midscale w/ F&B 173,3 14,33 21,79 l  The Upper Upscale segment made Midscale w/o F&B Economy 27,23 87,79 2,66 4,67 5,91 8,77 up 25.1 % , followed by the Upscale Unaffiliated 1,351,505 32,03 46,66 segment 23.8 %, the Luxury segment Total 2,212,494 173,98 253,82 18.4 % and the Unaffiliated segment 18.4 %. Caribbean/Mexico pipeline by Chain Scale segment for May 2010 (number of rooms): Chain Scale Existing Supply In Construction Total Active Pipeline* Luxury 21,43 1,29 2,15 l  Key market developments in Mexico, Upper Upscale 32,83 2,31 2,69 Upscale 85,14 1,54 4,05 Dominican Republic and Puerto Midscale w/ F&B 50,73 260 935 Rico Midscale w/o F&B 26,22 1,5 4,88 Economy 3,45 456 696 Unaffiliated 272,2 1,53 1,78 l  The Caribbean/Mexico hotel Total 492,01 8,88 17,17 development pipeline comprises 133 hotels totaling 17,172 rooms in 2010 Source: STR Global construtcion Report 2010l  1/09/10 Hotel positioning in economical downturn Cédric Michiels 9
  • 10. International hotel supply & evolution International World Tourist Arrivals 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 Source: MKG Hospitality 2010 l  Renewed dynamism in mature market-continents is most apparent! l  “Moderate growth and reduced pipeline developments are anticipated due to the difficultiesSource: MKG Hospitality 2010 in obtaining financing”1/09/10 Hotel positioning in economical downturn Cédric Michiels 10
  • 11. European hotel supply and evolution 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 Source: MKG Hospitality 2010 recent merger with Hesperial  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. Source: MKG Hospitality 2010 1/09/10 Hotel positioning in economical downturn Cédric Michiels 11
  • 12. Road map to recovery and emerging marketsl  Getting back to basics is often a l  The recovery is lead by Asia with starting point for making China and India projecting improvements. What motivates economic growth of 8-10 % people? Our values? l  Brazil, India and Rusial  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.1/09/10 Hotel positioning in economical downturn Cédric Michiels 12
  • 13. Innovation in hospitality “Innovation is the ability to see change as an opportunity - not a threat”New hotel / accomodation concepts l  The source of innovation is people,l  POD Hotels / POD Beds so motivation is the ingredient.l  Versatile / mobile modular rooms l  Develop stronger technological revenue optimization tools andl  Pixel Hotels distribution channels.l  Dream and Fly 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. Qbic Hotels1/09/10 Hotel positioning in economical downturn Cédric Michiels 13
  • 14. Quality control and sustainabilityl  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 experience1/09/10 Hotel positioning in economical downturn Cédric Michiels 14
  • 15. 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.1/09/10 Hotel positioning in economical downturn Cédric Michiels 15

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