Hotel Market Trends - Hospitality Net · Source: Arthur Andersen Hotel Industry Benchmark Survey 0...

Hotel Market Trends2001: A turbulent year

Rutger SmitsDirector - Hospitality Consulting

5th Annual Asia Pacific Hotel Investment ConferenceSingapore, 17 April 2002

© 2002 Andersen. Andersen Worldwide, SC. All rights reserved.

Hospitality Consulting

1© 2002 Andersen. Andersen Worldwide, SC. All rights reserved.

Our expectations last year for 2001…..

Economy• US economy will remain weak• Asian economies following US trend but no crisis• Stagnation in Japan• Uncertainty in Indonesia and Taiwan• China is on everybody’s radar

Markets• Growth in average rate• Growth for Hong Kong, Singapore, Shanghai and Bangkok• Bleak outlook for Tokyo, Seoul• Australia expected boom following Olympics


…..and how we got it all wrong

Economy• US economy fledgling• Asian economies still soft…..• …..but getting ready for growth spurt• and then September 11 hit…..

Markets• Shanghai and Bangkok, as expected, gained significant RevPAR• Against expectations, Hong Kong and Singapore both declined • Tokyo and Seoul managed to hold on to 2000 performance• Australia hit by Ansett collapse• Currency weakness played havoc with results in US$


Are global markets tracking each other? - RevPAR % change

-40%

-30%

-20%

-10%

0%

10%

20%

Janu

ary

Febru

aryMarc

hApri

lMay

June Ju

ly

Augus

t

Septem

ber

Octobe

r

Novem

ber

Decem

ber

US$ Europe (€) Asia (US$) Australia (A$)

Source: Andersen Hotel Industry Benchmark Survey and STR


Post September 11 - better than expected?

Immediate Impact

• Crisis of confidence

• Airlines slash routes and staffing

• Massive decline in US outbound traffic

• Global international visitor arrivals down 11%

• RevPAR decline in gateway cities, regional markets less affected

• Upscale and international sectors most affected

Current Situation

• RevPAR decline decelerating

• Outlook brightening


Global RevPAR % change – pre/post September 11

-20%

-15%

-10%

-5%

0%

5%

Asia

Australi

a

Europe US

Jan - Aug Sept - Dec

Source: Andersen Hotel Industry Benchmark Survey


Currency fluctuations against US$ – Jan 2000-Dec 2001

Jan-0

0

Feb-0

0

Mar-00

Apr-00

May-00

Jun-0

0Ju

l-00

Aug-00

Sep-0

0Oct-

00

Nov-00

Dec-00

Jan-0

1

Feb-0

1

Mar-01

Apr-01

May-01

Jun-0

1Ju

l-01

Aug-01

Sep-0

1Oct-

01

Nov-01

Dec-01

Australia - Dollar

China - Renminbi

Hong Kong - Dollar

Indonesia - Rupiah

Japan - Yen

Korea - Won

Malaysia - Ringgit

New Zealand - Dollar

Philippines - Peso

Singapore - Dollar

Taiwan - Dollar

Thailand - Baht

Vietnam - Dong


RevPAR % change August YTD - local currency vs US$

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Bali

Bangk

ok

Beijing

Ho Chi

Minh City

Hong K

ong

Jaka

rta

Kuala L

umpu

rMan

ilaOsa

ka

Phuke

tSeo

ul

Shang

hai

Singap

ore Taipe

iTo

kyo

Melbou

rneSyd

ney

Auckla

nd

Local Curr US$Source: Andersen Hotel Industry Benchmark Survey


RevPAR % change August YTD vs Sept-Dec (local curr.)

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Bali (US$)

Bangk

ok

Beijing

Ho Chi

Minh City

Hong K

ong

Jaka

rta

Kuala L

umpu

rMan

ilaOsa

ka

Phuke

tSeo

ul

Shang

hai

Singap

ore Taipe

iTo

kyo

Melbou

rneSyd

ney

Auckla

nd

Aug YTD Sept-DecSource: Andersen Hotel Industry Benchmark Survey


RevPAR % change Sept-Dec - local currency vs US$

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Bali

Bangk

ok

Beijing

Ho Chi

Minh City

Hong K

ong

Jaka

rta

Kuala L

umpu

rMan

ilaOsa

ka

Phuke

tSeo

ul

Shang

hai

Singap

ore Taipe

iTo

kyo

Melbou

rneSyd

ney

Auckla

nd



RevPAR % change August YTD vs Sept-Dec (US$)

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Bali

Bangk

ok

Beijing

Ho Chi

Minh City

Hong K

ong

Jaka

rta

Kuala L

umpu

rMan

ilaOsa

ka

Phuke

tSeo

ul

Shang

hai

Singap

ore Taipe

iTo

kyo

Melbou

rneSyd

ney

Auckla

nd

Aug YTD Sept-DecSource: Andersen Hotel Industry Benchmark Survey


RevPAR % change total 2001 – Local currency vs US$

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Bali

Bangk

ok

Beijing

Ho Chi

Minh City

Hong K

ong

Jaka

rta

Kuala L

umpu

rMan

ilaOsa

ka

Phuke

tSeo

ul

Shang

hai

Singap

ore Taipe

iTo

kyo

Melbou

rneSyd

ney

Auckla

nd



RevPAR % change total 2001 – local currency

-15%

-10% -5% 0% 5% 10

%15

%20

%25

%30

%

Osaka

Manila

Kuala Lumpur

Jakarta

Hong Kong

Ho Chi Minh City

Beijing

Bangkok

Bali

Occupancy RateSource: Andersen Hotel Industry Benchmark Survey


RevPAR % change total 2001 – local currency

-25%

-20%

-15%

-10% -5% 0% 5% 10

%15

%20

%

Auckland

Sydney

Melbourne

Tokyo

Taipei

Singapore

Shanghai

Seoul

Phuket



RevPAR % change total 2001 – US$

-30%

-25%

-20%

-15%

-10% -5% 0% 5% 10

%15

%20

%

Osaka

Manila

Kuala Lumpur

Jakarta

Hong Kong

Ho Chi Minh City

Beijing

Bangkok

Bali



RevPAR % change total 2001 – US$

-35%

-30%

-25%

-20%

-15%

-10% -5% 0% 5% 10

%15

%20

%

Auckland

Sydney

Melbourne

Tokyo

Taipei

Singapore

Shanghai

Seoul

Phuket


18© 2002 Andersen. Andersen Worldwide, SC. All rights reserved.Source: Arthur Andersen Hotel Industry Benchmark Survey

30 40 50 60 70 80 90

Jakarta

Manila

Ho Chi Minh City

Kuala Lumpur

Bali

Auckland

Sydney

Phuket

Bangkok

Beijing

Shanghai

Singapore

Taipei

Melbourne

Hong Kong

Seoul

Tokyo

Osaka

Hotel operating performance - Asia Pacific 2001Room occupancy %



0 20 40 60 80 100 120 140 160 180 200

Ho Chi Minh City

Kuala Lumpur

Auckland

Jakarta

Bangkok

Manila

Beijing

Melbourne

Sydney

Bali

Singapore

Shanghai

Phuket

Hong Kong

Taipei

Osaka

Seoul

Tokyo

Hotel operating performance - Asia Pacific 2001Average room rate (US$)



0 20 40 60 80 100 120 140 160

Jakarta

Ho Chi Minh City

Kuala Lumpur

Auckland

Manila

Bangkok

Beijing

Bali

Sydney

Melbourne

Singapore

Phuket

Shanghai

Hong Kong

Taipei

Seoul

Osaka

Tokyo

Hotel operating performance - Asia Pacific 2001RevPAR (US$)



0 20 40 60 80 100 120 140

Shanghai

Munich

Beirut

Dubai

Moscow

Milan

Hong Kong

Amsterdam

London

Rome

Seoul

Geneva

Paris

Tokyo

Hotel operating performance – global comparisonRevPAR (US$)



0 20 40 60 80 100 120 140

Jakarta

Jerusalem

Amman

Kuala Lumpur

Manila

Bangkok

Cairo

Beijing

Berlin

Sydney

Manchester

Singapore

Brussels

Shanghai

Hotel operating performance – global comparisonRevPAR (US$)



What to expect in 2002 - market outlook

Threats

• Uncertain geopolitical outlook

• US and Japanese demand down

• Cuts in corporate budgets

• Shorter lead times

• Hard to drive rate growth in wholesale markets

Opportunities

• Recovery is in sight

• Intra-regional travel

• Pent-up demand

• Budget sector – resilient

• New source market: China


Strategies for survival

• Focus on short-haul markets

• Safety is all important

• Niche marketing

• Product diversification

• Cost efficiencies

• Save, but don’t cut corners

• Confidence in the long term success of our business

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www.hotelbenchmark.com

Hotel Market Trends - Hospitality Net · Source: Arthur Andersen Hotel Industry Benchmark Survey 0...

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