Global Hotel Market Sentiment Survey

The second half of 2009 may be even bleaker for the hotel industry than the first according to the s

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. August 25, 2009

AUGUST 25, 20009 - The sentiment scores of the survey, decreased to a global average of negative 40, compared to negative 34, recorded in the initial survey in January.

However, Robert Hecker, Chairman of the Horwath HTL Global Committee says this may be misleading as year-to-date global results from STR Global indicate all regions around the world have experienced double-digit declines in RevPAR performance-with the Middle East/Africa region faring best at a decline of 14.8 percent.

'Most likely, what we are seeing is an adjustment in the market sentiment based on what has actually occurred in the first half' says Mr. Hecker 'and not an expectation that second half results will continue to deteriorate from first half actual performance'.

'The first survey in January indicated that on average, hoteliers around the globe were expecting RevPAR declines somewhere in the order of five to 10 percent, which is below the reality we see six months later'.

As a result, expectations for the second half of the year have been adjusted into further negative territory, based on the greater than expected negative results in the first half.

The sentiment survey in January showed that just over 20 percent of hoteliers expected declines in performance of more than 10 percent in 2009. This has increased to about 30 percent in the outlook for the second half of 2009.

Europe

Europe is the region with the most negative outlook for the second half of 2009, which not surprisingly has also seen the largest decline in RevPAR performance of 31.3 percent based on year-to-date June data from STR Global.

The sentiment score index for Europe has declined from negative 36 recorded in the January survey to negative 55 in the mid year survey. In Europe, 60 percent or more of respondents felt that each of the performance indicators measured would be worse or much worse than that achieved in the second half of 2008.

Australia/Pacific

The other region to have seen a significant change in its sentiment score was Australia/Pacific, decreasing from negative 34 in February to negative 48 in the mid-year survey.

Performance data published by STR Global indicates a 29 percent decrease in RevPAR for the first half of the year, although this is no worse than other areas of Asia, yet the sentiment score for Asia remained unchanged. Hoteliers in this region expect to see larger declines in ADR than in occupancy, which is also in line with actual performance levels in the first half. In the mid-year survey, 26 percent of hoteliers in Australia expect to see ADR declines of more than 10 percent compared to only 12 percent of respondents in the January survey.

South America, Africa & Asia

South America and Africa have seen marginal changes to their sentiment score, albeit to the negative, while Asia has retained the same sentiment score. Asia has seen Indonesia and the Philippines move into positive sentiment territory, with an improvement in sentiment recorded by Japan (albeit still very negative), China has remained relatively stable, while Singapore, Thailand and Malaysia have all recorded a more negative sentiment score.