?? ?? Hospitality & Travel Industry Insights ?? ??
Keba Vinod
Experienced Business Leader | International Trade | Hospitality & Travel | Service Industry | Strategic Growth
Welcome aboard to our latest edition of the Hospitality and Travel Newsletter! We're excited to unveil the latest trends and insights shaping the vibrant worlds of hospitality and travel.
Be sure to check out the new section at the end of this newsletter titled "Valuing a Hotel: Understanding Market Worth" — don't miss it!
Join us as we delve into exciting hotel performance, investments, and travel trends and spotlight recent game-changing transactions in the hospitality realm.
Let's embark on this adventure together and discover what's in store for the world of travel and hospitality! ????
Global Hotel Investment Outlook 2024 | JLL Research
In 2023, the global lodging industry rebounded strongly, with RevPAR surpassing pre-pandemic levels across regions, led by the Middle East, Europe, and the Americas. While Asia Pacific is still recovering, positive trends indicate a return to pre-pandemic levels by Q1 2024. Urban markets like London, New York, and Tokyo are expected to attract substantial investor interest.
Further growth opportunities are anticipated, especially in outbound Chinese travel, which is projected to gain momentum for the rest of 2024. Europe will remain a favoured destination, driven by events like the Summer Olympics and concerts. Travellers will prioritise experiences aligned with sustainability and wellness, favouring hotels that communicate these values effectively. Hotel brands will play a crucial role in attracting consumers and investors, potentially leading to brand consolidation. Additionally, sustainable hotel investment and regenerative tourism are on the rise. These trends will shape the industry in 2024.
Source: JLL report
?? UK Hotel Market Overview:
Despite the prevailing uncertainties in the market and the upcoming UK general election, the beginning of 2024 has brought positivity to the UK hotel investment sector. Investment volumes in the first quarter have soared to their highest levels since 2019, largely propelled by two significant portfolio sales at the year's outset. Overall, the enduring optimistic sentiment towards the sector indicates a promising path for deal activity as the year unfolds, with expectations of base rate cuts in the latter half of 2024 and projections suggesting that overnight stays will exceed 2019 levels according to the latest Cushman and Wakefield report
The UK's hotel market, from luxury to budget brands, was valued at ￡24.7 billion in 2023, up from ￡16.42 billion in 2022. The 2024 forecast shows a slight decrease of ￡400 million. ????
?? Occupancy Rates:
March 2024 saw a 74% hotel occupancy rate in the UK, slightly lower than March 2023, marking a strong recovery post-pandemic. ????
?? Key Players:
UK General Election Announced for July 4, 2024
Prime Minister Rishi Sunak has set July 4, 2024, as the date for the next UK general election, a significant move given that elections were not required until January 2025. This decision comes at a time when the Conservative Party seeks to extend its 14-year governance amid competition from the Labour Party. The announcement, made against a backdrop of a declining inflation rate now close to the target of 2.3%, introduces a mix of uncertainty and opportunity within the hospitality sector.
The upcoming election period is expected to be a time of cautious optimism for hoteliers, given the economic recovery post-pandemic, despite ongoing challenges with labour costs and operational margins. Significant events such as Euro 2024, the Summer Olympics, and Taylor Swift's UK tour are likely to bolster the hospitality sector further, offering potential revenue boosts from increased tourism and travel.
?? Hotels Earnings Highlights:
Hilton Worldwide Holdings Inc.: Hilton's Q1 2024 results show strong performance, with a diluted EPS of $1.04 and an adjusted EPS of $1.53. The net income was $268 million, and adjusted EBITDA reached $750 million. Hilton added nearly 30,000 new rooms to its pipeline and repurchased 3.4 million shares, returning $701 million to shareholders. ????
Wyndham Hotels & Resorts: Wyndham reported stable growth, with global RevPAR up 1% and a development pipeline reaching 243,000 rooms. The company entered the upscale extended stay segment through a partnership with WaterWalk Extended Stay by Wyndham. ????
Marriott International: Marriott's Q1 2024 saw a 4.2% increase in global RevPAR, with strong international performance. The company added 46,000 net rooms and repurchased 4.8 million shares. Marriott Bonvoy membership grew to 203 million. ????
InterContinental Hotels Group (IHG): IHG's Q1 2024 global RevPAR increased by 2.6%, with significant growth in EMEAA. The company opened 46 hotels and signed agreements for 129 more, expanding its pipeline to 305,000 rooms. ????
Choice Hotels International: Q1 2024 net income was $31 million, with adjusted net profit up 9%. The global pipeline reached over 115,000 rooms, with significant growth in conversion rooms. ????
Hyatt Hotels Corporation: Hyatt reported Q1 2024 net profit of $522 million and adjusted net profit of $75 million. Systemwide RevPAR increased by 5.5%, with a pipeline of 129,000 rooms. ????
Meliá Hotels International: The group reported €440 million in Q1 2024 revenue, up 11.1%, with strong RevPAR growth. Meliá plans to double its hotel portfolio in Mexico by 2025. ????
Minor Hotels: Q1 2024 revenue grew by 13% to €460 million, with strong performance across Europe and the Americas. The company plans to open 200 new hotels by 2026. ????
Travelodge: Q1 2024 revenue increased by 3.5% to ￡205.5 million, driven by steady demand and key investments. Travelodge opened two new UK hotels and doubled its presence in Spain. ????
Source: Yahoo! Finance
?? TBO Tek Ltd Stock Debut:
TBO Tek Ltd made a strong debut at Dalal Street, listed at Rs 1,426 on NSE (India), a 55% premium. The IPO raised over INR 1,550.81 crore (￡150.43 million) with robust bidding from institutional and retail investors. ????
?? Incentive Travel Surge: Incentive travel is booming, with companies rewarding top performers through personalized, wellness-focused, and sustainable experiences. Hotels are increasingly catering to this market. ?????
European Hotel Openings: Accelerating Growth
Europe is poised to witness the inauguration of approximately 350 new hotels in 2024, as indicated by data from Lodging Econometrics (LE), a leading industry specialist. The continent's robust pipeline of new properties is steadily expanding, with over 1,700 projects recorded by the end of 2023. If all these ventures come to fruition, they would contribute over 250,000 rooms to Europe's hospitality landscape.
Top Cities in Europe:
In the preceding year, Europe welcomed the opening of 316 new hotels, introducing nearly 42,000 rooms across the region. Projections suggest a further increase in 2024, with an estimated 350 properties and 48,600 rooms set to debut, followed by 383 new hotels and 52,000 rooms in 2025.
According to LE, the construction pipeline in Europe is currently dominated by "upper upscale, upscale, and upper midscale" properties. Notably, the United Kingdom, particularly London, remains at the forefront of new hotel development in Europe. With 322 projects in the pipeline, including 77 in London alone, the UK anticipates the addition of 44,000 rooms, with 13,700 rooms slated for the capital.
Following the UK, Germany demonstrates notable activity with 195 hotel projects and 31,800 rooms in development. France, Turkey, and Portugal also feature prominently, with 127 hotels/14,200 rooms, 118 hotels/17,800 rooms, and 114 hotels/13,900 rooms respectively.
Beyond London, Istanbul emerges as the European city with the second-largest pipeline, boasting 53 hotels and 8,900 rooms. It is closely followed by Lisbon, Dublin, and Dusseldorf in terms of upcoming hotel developments.
Source : BTN Europe
?? Global Travel Trends: American Express Travel? 2024 Report
American Express Travel?'s 2024 report highlights key trends:
For more insights, check out the American Express article.
Knowledge Base:
Valuing a Hotel: Understanding Market Worth
Determining the market value of a hotel is crucial for investors aiming to understand its position in the real estate market.
The valuation is based on several key metrics, including Average Daily Rate (ADR), Revenue per Available Room (RevPAR), Net Operating Income (NOI), capitalisation rate, occupancy rates, and the dynamics of the local real estate market. ADR assesses the effectiveness of the hotel's pricing strategy, whereas RevPAR offers insights into overall revenue performance, aiding in decisions about pricing, market positioning, and profitability.
These evaluations are essential for negotiating purchase prices, estimating potential returns, and making investment decisions that are in line with market trends and expected profits.
Several methods are employed to ascertain a hotel's market value:
That's it for now and thank you for reading our latest insights on the hospitality and travel industry.
Stay informed and make the most of the upcoming trends to enhance your business strategies.
I appreciate your feedback and please comment below if you would like to add anything to the newsletter for the forthcoming months.
Other Sources : Hotel investment, Hotelnews now, Costar, Guardian news and many more
Revenue Management expert driving client success at Yanolja Cloud Solution
6 个月Well said!
Lecturer
6 个月A good summary of the present trend. Very informative.