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in Western and Eastern Europe:
Gaining Momentums
Elke Geieregger HVS London
Hotel Tourism & Leisure Investment Forum Bucharest
3 May
2011
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1. Global/European Tourism Overview
2. Hotel Performance in Europe in 2010 with Focus on CEE3. Hotel Value Trends
4. Outlook for 2011 and Beyond
Overview
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International travel increase forecast at 4% in
2011...
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but Europe not yet back to pre-crisis levels
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2. Hotel Performance in Western and
Eastern Europe 2010: Gaining
Momentum
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RevPAR bottoms out in 2009 Renewed growth in 2010
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Source: STR
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Most markets record RevPAR growth in 2010(Biggest improvers/chasers in Western and Eastern Europe)
Moscow
Tallin
Bratislava
Bucharest
Budapest
Sofia
Prague
- 7 -Source: STR - RevPAR change in Euro
-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
Frankfurt
Munich
Stockholm
Zurich
Athens
Copenhagen
Dublin
Warsaw
r urg
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3. Hotel Values
in Western and
Eastern Europe
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Hotel Transactions Double in 2010
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Q3/Q4 2010: Acceleration of Transactions
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Top and Bottom FivePercentage Change in Hotel Value per Room ()
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Values have bottomed out across Europe
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Western and Eastern Europe: still value
shortfalls compared to peak 2007/10 ()2007 2008 2009 2010 % Change
2010/09
% Change
2010/07
Paris 601,700 566,200 545,900 568,700 4% -5%
London 623,400 479,600 483,900 524,400 8% -16%
Geneva 395,300 463,700 419,300 413,200 -1% 5%
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Rome 453,500 373,500 335,200 341,700 2% -25%
Warsaw 208,800 200,400 164,000 172,500 5% -17%
Bucharest 204,000 160,300 123,600 113,700 -8% -44%
Prague 249,500 197,100 157,000 159,500 2% -36%
Budapest 191,300 158,600 131,900 131,000 -1% -32%
Bratislava 196,600 166,800 135,500 114,000 -16% -42%
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4. Outlook for 2011 and Beyond
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Value increase in 2011/2012 ( Cumulative Forecast)
- 1 5 -Source: HVS London.
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Tourism Outlook
Economic recovery in a
number of EU countries
Impact of Middle Eastunrest
EU outbound travel closer
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to home Increased importance of
BRIC countries
Moderate increase in travel
forecast for Europe
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Performance Outlook
Healthy occupancy growth in 2010 in most markets
Selective average rate growth in 2010, turnaround more
widespread by H2 2011
Crisis has globalised the competition
Value for Money is here to stay
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Increase in business travel and corporate budgets expected
Conference & banqueting business slowly recovering
Adjust hotel business mix to drive rates
Strong cost-cutting measures in 2009/10; cost structuresadapt from crisis mode in 2011
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Investment Outlook
More hotel capital
expenditure/refurbishment
US transaction activity is up
Equity chasing for deals
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Distressed selling?
Continuing shortage of
debt finance, new lending
and development finance
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Elke Geieregger
Associate Director
HVS London Office
+44 20 7878 7747+ 44 79 1224 0964
www.hvs.com