Tag: trends

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HotStats: European hotel rates down 5 per cent in July

Mainland Europe hotels saw a 5 per cent decline in average room rate to €170.60 in July, according to data from HotStats.

Gross operating profit per available room (GOPPAR) was down by 9.4 per cent year on year. In addition to being the sixth month of year-on-year GOPPAR decrease in the region since the beginning of 2019, it was also one of the greatest months of profit decline this year.

“The drop in average room rate is disconcerting,” said Michael Grove, managing director, EMEA, at HotStats. “Especially since it’s the second consecutive month that rate has dropped year on year, after positive rate growth in the subsequent five months of the year and all of 2018.”

For hotels in Moscow, it was a case of hotel rates returning to normal levels after last year’s 2018 FIFA Men’s World Cup, as average room rate fell by €157.06 year on year to €92.86. However, hotels in the Russian capital did successfully record the highest room occupancy of the year so far, at 87.9 per cent.

In contrast to the regional falls in room rate, hotels in Nice saw a typical summer increase as room occupancy hit 90.2 per cent and a high was recorded in average room rate at €267.92.

Elsewhere in the world, hotel rates in the Middle East and North Africa (MENA) fell to €119.19 with occupancy at 67 per cent. Hotels in Dubai were among those experiencing the biggest falls, with average rates seeing a 10.3 per cent decrease year-on-year.

“Profit decline in MENA has now become a trend rather than a blip,” said Grove. “With average room rate showing no sign of negative year-over-year letup, hoteliers will have to find cost-cutting measures to obtain positive GOPPAR increases in the interim.”

It was a different story across the pond, where hotels in the US saw a 0.9 per cent rise in average room rate to $201.51 and a 0.6 percentage point jump in occupancy to 81.1 per cent.

“Hotels in the US are bucking global profit trends, with only three months over the last 22 when GOPPAR turned negative,” said David Eisen, director of hotel intelligence, Americas, at HotStats. “Operators are doing an admirable job of making sure top-line gains result in bottom-line success, but they will need to continue to drive flow through in order to maintain and keep these gains afloat.”

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Cricket World Cup boosts London hotel performance

The ICC Cricket World Cup has boosted hotels’ performance in London but failed to stop the regions sliding.

That is according to the UK Hotel Market Tracker: Q2 2019 produced by HVS London, AlixPartners and STR, which reports London recorded continued strong growth in the second quarter of the year as hoteliers pushed rates for visitors travelling to watch the cricket.

In contrast, regional revenue per available room (revpar) decreased for the second consecutive quarter, even with numerous matches being hosted outside of the capital. The report said the combination of top line retraction, cost pressures and unrelenting new supply is putting significant pressure on regional hotel margins.

With revenue declining, costs increasing and active pipeline remaining at 6% of current supply, operators may struggle to increase profitability, particularly in locations outside the main tourist hubs or without robust corporate activity.

Revpar in London increased by 6% in the second quarter, as hoteliers benefited from sporting events including the Cricket World Cup and Major League Baseball at the London Stadium.

Active pipeline (10% of current supply) will be monitored by operators in the capital given relatively flat occupancy, but a revpar increase of over 6% over the last 12 months demonstrates how robust demand remains.

Across the UK, only £360m of transactions were completed in Q2 2019 – some £144m in London and £210m in the regions – with transaction flow continuing to be impacted by Brexit uncertainty, which is seeing deals either being put on hold or taking longer to complete.

£2.1b of transactions were completed in London in the 12 months to Q2 2019, an increase of 54% on the previous year. This figure was boosted by the sale of the Grange portfolio in Q1 (£1b) and the 163-bedroom Crowne Plaza Kensington in Q2 to a Singaporean consortium led by Heeton Holdings (£84m, or £513,000 per bedroom).

Yields in London and the regions remain tight in comparison to historical averages, although there was little evidence of further compression in Q2 2019, except in isolated cases in London.

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Italy sees International events on the rise with 8.1 per cent increase in 2018

Italy has seen a jump in the number of international events, which have a significant proportion of overseas participants, increase from 7.9 per cent in 2017 to 8.1 per cent in 2018.

Most conferences and events (59.5 per cent) are local in dimension – with participants (excluding speakers) mainly coming from the same region as the host venue.

Overall, conferences and events held in Italy increased by 5.8 per cent in 2018, with participant figures slightly down (-2.4 per cent).

The decrease in growth figures was due to a fall in conferences promoted by international associations.

As a result, the recommendation was that Italy needs to undertake more promotional activities to combat competition from other destinations.

“Internationalisation, planning and quality are the three elements Italy needs to compete and get out of the impasse we have observed in the associations markets,” said Alessandra Albarelli, president of Federcongressi&eventi.

“Internationalisation means strengthening Convention Bureau Italia’s role in promoting the country as a MICE destination, in partnership with national tourist board ENIT; planning consists of implementing, together with all the institutions, particularly the Ministry of Agricultural, Food and Forestry Policies and Tourism, long-term, targeted strategic activities for the sector.”

The latest results are from the Italian Survey of Conferences and Events, the research project by Italy’s meeting industry association Federcongressi&eventi.

Professor Roberto Nelli, who headed up the survey made some recommendations: “A first attempt at mapping events and conferences hosted in Italy shows that, given the current situation in which most events are hosted in places that can be described as part of Italy’s ‘Great Beauty’, it is possible to identify meeting industry development strategies that leverage the strengths of certain regions: for example, those with vast potential in their cultural and natural heritage that has not been fully exploited.”

Hotels and conference centres were the best performers. Conference hotels play host to most events: 80.6 per cent of the total, +6.9 per cent versus 2017. Conference centres also performed well, accounting for 3.2 per cent of total events (+3.9 per cent) but also registering the highest average number of events per venue: 156.3.

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Bookings spike suggests London as Europe’s most connected business hub

The UK now serves more European and international destinations than any other European city, according to new research commissioned by the London Convention Bureau.

London has direct air connections to 401 destinations around the world and more connections with Europe (243 routes) than any other European city, according to RDC Aviation, which analyses city flight data.

Transportation links with Europe are well served with by high-speed train links, like Eurostar, to cities across France and Belgium. There is a new service between London and Amsterdam, with a third daily direct train from London to Rotterdam and Amsterdam. The extra service, which launches on 11 June, was due to demand for routes to the Netherlands.

Eurostar claims that a London-Amsterdam Eurostar journey emits 80 per cent less carbon than the equivalent flight.

Due to the strong transport links with mainland Europe, London’s Convention Bureau recently announced a new partnership with the Paris Convention and Visitors Bureau that will see the two cities forming a partnership offering a range of two- in-one incentive travel products.

“The number of high-profile associations and corporations that are now choosing London is an endorsement of the city’s position as a world-class location for meetings and events, as well as being a global centre for learning,” James Rees, executive director for Conferences and Events at ExCeL London said.

The meetings and incentives market remains a tour de force in the UK capital with brands like Adobe, Salesforce, Amazon Web Services, Oracle, Google and Microsoft hosting large scale corporate events in London this year.

Massive meetings are also on the horizon, with London Tech Week welcoming over 55,000 visitors in June 2019, at a number of venues including the Barbican and the Tower of London. Sibos, one of the world’s largest financial services, will host more than 11,000 delegates.

“We are very excited to be bringing Sibos to London for the first time, this year. London is one of the world’s great financial centres. It’s a city where business, creativity and innovation converge – and that’s why it’s the perfect place for Sibos 2019,” Chantal Vanes, head of Sibos said.

“While providing a great venue to do business, London’s ever-changing cultural offering, spanning world-class museums, theatre and the arts, will also allow delegates to enjoy their experience at the world’s premier financial services event to the fullest.”

London fact box

  • Latest figures show that business visitors to London spent £3.5 billion annually.
  • From September 2017 to October 2018, London welcomed 3.5 million international overseas business visitors.
  • According to findings from the Hotel Monitor Report, a new report monitoring hotel capacity across European cities, London is set to add 11,600 rooms to its hotel market by 2020.
  • The capital’s hotel market is set to outpace a number of major European cities by 2020, including Paris, Berlin, Lisbon and Milan.
  • Hotel operators are increasing hotel capacity across the city, with an 8 per cent uplift predicted by 2020.
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Scottish cities account for 24% of all major association meetings in the UK

Scotland is bucking the trend with the number of major association events held in 2018 up 5% from 2017, despite the UK dropping two places in the latest ICCA Country and City Statistics report for total number of international association meetings.

The report, released early this week, revealed that the number of major association meetings that took place in the UK dropped by 3% in 2018. However, Scotland celebrated an increase in the number of meetings during the same period.

In 2018, the country hosted 137 events, up from 114 in 2017, and contributed 24% towards the UK’s total for the year. Scottish cities moved up the rankings in 2018 with Edinburgh taking position 27 and Glasgow taking position 47 in the world rankings, with only London coming above them in the entire UK.

Last June, the Edinburgh International Conference Centre hosted the European Orthodontics Society Congress, which welcomed more than 2,500 delegates from across mainland Europe. The congress, the society’s largest annual gathering, also utilised the entire Surgeons Quarter campus for its President’s Reception.

Amanda Ferguson, head of business tourism, Convention Edinburgh said: “I’m delighted to see Edinburgh position in the top 30 of the ICCA World Rankings again. The ability to continuously attract international association meetings in a very competitive marketplace is underpinned by our vibrant knowledge economy and sectoral strengths.”

Climbing 25 positions in the ICCA rankings, Glasgow was the host city for a number of major association congresses in 2018 including the World Haemophilia Congress and the European Society of Sports Traumatology, Knee Surgery and Arthroscopy (ESSKA) Congress.

Both held at the SEC, The World Haemophilia Congress attracted more than 5,000 delegates from 137 countries to its four-day event and the ESSKA Congress welcomed more than 4,000 delegates across its three day programme.

Last year, VisitScotland Business Events won the ICCA Best Marketing Award for its first-ever digital campaign “Scotland. Where ideas become legend”. The campaign, which launched in November 2017, highlights the reasons why event organisers should view Scotland as the perfect partner for international conferences – its globally renowned academic credentials, historic pioneering spirit and world changing innovation.

Rory Archibald, association & sectors, VisitScotland said: “We’re thrilled that Glasgow and Edinburgh have made huge leaps in the 2018 ICCA rankings. Over the past two years we have been showcasing Scotland to the world through our award-winning Legends campaign, INNOVATETHENATION ambassador network and most recently our inaugural Association Reception Series in Brussels. Business Events are a crucial tool for economic and social change in Scotland, so we will continue to work tirelessly with our partners, our knowledge centres and the Scottish Government to attract more ground-breaking events across the country.”

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HBAA hails promising trends and positive outlook for 2019

HBAA chair Angie Mason hailed the findings of the report, saying that “promising trends provide good reasons for a positive outlook on 2019”.

The report, developed in partnership with The MeetingsBenchmark Ltd. indicates that the average spend per meeting increased again from £1,954 in 2017 to £1,971 in 2018, an increase of almost 1 per cent. However, the average spend per delegate went down slightly from £88.35 in 2017 to £85.71 last year, a decrease of 3 per cent.

While the average day delegate rate (DDR) rose imperceptibly from £32.88 in 2017 to £32.89 last year, the average number of delegates also increased slightly from 53 to 54. With the average size of meetings booked to date for 2019 currently 72, forward prospects so far this year are encouraging.

There were also positive indications in the reduction of lead and conversion times. The average lead time for forward booking of events went down from 83.5 days to 79.7 days while the average conversion time went down slightly from 19 days to 18.5 days,

The HBAA Meetings Barometer also reveals a wide range in the average DDR across the country. There is a major difference between London (£39.97) and Newcastle (£24.91) with Manchester (£31.92), Birmingham (£29.87), Scotland (£27.54), Bristol (£27.51) and Leeds (£26.56) between them.

Angie Mason, HBAA chair said: “The HBAA Meetings Barometer once again provides a fascinating snapshot of the market and highlights several good reasons to be positive and optimistic about the year ahead.”

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2019 will continue to see high levels of cross-border investment

The strong levels of cross-border investment into the European hotel market – which reached $4.9b (£3.8b) in 2018 – will continue in 2019.

The JLL’s Hotel Investment Outlook 2019 predicts that, despite political uncertainty, tourism and business fundamentals remain solid thanks to strong infrastructure developments in the region, which will continue to attract international investors towards strong assets and opportunities in these markets.

Germany and the UK account for nearly 60% of pipeline rooms currently under construction and are expected to absorb additional supply in the medium term due to strong tourism growth forecasts.

The report predicts that the European hotel market will be driven mostly by single asset deals, with portfolio trades expected to reduce, given the significant volumes of transaction of this type seen over the past two years. Overall investment volumes across Europe, the Middle East and Africa are expected to soften to $21.2b (£16.3b) from $22.9b £17.6b) in 2018.

It also predicts the sector will see new investors emerging, with diverse sources of core and core-plus capital are increasingly considering investment in the hotel market, and an increase in hotels entering the flexible workspace market transforming hotel lobbies into communal workspaces.

Philip Ward, EMEA CEO, JLL Hotels & Hospitality Group, said: “Political uncertainty and the volatility in equity markets will test investors’ sentiment throughout the year. However, we expect hotel investment volumes to hold steady on 2018 levels owing to hotels’ attractive yield profile compared to other sectors.”

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Tourism industry confident despite Brexit, says UKinbound research

The research, which was collected by Qa Research, found that 59% of UKinbound members stated they were confident about business in the upcoming 12 months. This was the highest rate recorded since October 2017.

The increase in confidence was influenced by an influx of forward bookings, the value of the pound, and increased interest from North American and Asian markets.

Business also signalled that the number one activity they’re expecting to be most in demand from inbound tourists are cultural experiences, followed by ‘bespoke activities’.

However, businesses also stated the industry faces a number of problems in the upcoming months, notably the uncertainty around Brexit.

Staff recruitment and retention, improving the UK’s product offering and offers for visitors, attracting visitors from new markets, and currency fluctuations were also cited as general concerns.

A review of 2018 found a few interesting statistics:

  • Throughout 2018 China and the US remained the two top growth markets
  • Less than a third (28%) of members felt that over-tourism has a negative impact on their business
  • A key challenge for many members continued to be the reduction of available EU workers

UKinbound CEO Joss Croft commented: “It is encouraging that even with the uncertainty surrounding Brexit, our latest Business Barometer shows that forward bookings are strong and that there is an increase in confidence levels amongst some of our members.

“However, we remain concerned about the Government’s proposed immigration strategy post-Brexit, which will look to restrict employing EU nationals to those only earning over £30k. 

“Recruitment and retention of staff in the industry is already a challenge – due in part to Brexit, and this proposed restriction could have a real impact on the industry, which relies heavily on its EU employees due to their language and customer service skills.”

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Conference and meeting venues urged to take part in UKCAMS 2019

Conference and meeting venues are being urged to take part in the 2019 UK Conference and Meeting Survey (UKCAMS), now in its 26th year.

Sponsored by VisitBritain, the UKCAMS 2019 report is scheduled for publication in June and has a specific focus on the value and volume of the market and the performance of meeting venues. It also highlights key market trends identified by venues.

The 2018 research found that the conference and meetings sector was worth an estimated £18.1 billion to the UK economy, with some 1.29 million meetings taking place in 2017.

Kerrin MacPhie, head of business events at VisitBritain, said: “We are pleased to be supporting the Conference and Meeting Survey to enhance our understanding of the work and activity undertaken by UK venues in the international business events market. We are also keen on using the survey to discover how UK venues and destinations are performing in securing international events.

“Industry initiatives such as this are great for encouraging as many UK venues to get involved in contributing to the research, which helps to ensure Britain remains a competitive destination in the global business events marketplace.”

The 2019 survey asks UK venues to provide data on their conference and meeting business during the calendar year 2018. It includes questions on the number of events hosted, rates achieved, event duration and size, client type, levels of residential and non-residential business, origins of business, and investment plans. UKCAMS 2019 also includes a section on the targeting and securing of international events by UK venues.

Participating venues will receive a complimentary, personalised summary report enabling them to benchmark their performance against other comparable venues. The research is being carried out by Tony Rogers of Tony Rogers Conference & Event Services and Richard Smith of RJS Associates via an online survey.

Tony Rogers said: “The UKCAMS research has a proven track record as a source of reliable and robust information and market intelligence. It helps venues and destinations, as well as other industry stakeholders, to understand the latest and emerging trends in order to target their marketing and investment decisions to greatest effect. UKCAMS also plays a key role in highlighting the significance and value of the conference and meetings sector to the national economy.”

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Despite uncertainty, mia reveals delegate day rate growth up ten per cent

Meetings venues across the UK have overcome a challenging economy to experience a 10 per cent rise in delegate day rates (DDR) over the last four years, according to figures gathered by the Meetings Industry Association (mia).

Despite the ongoing economic uncertainty and a slowdown in the rate of GDP growth, the average DDR among mia members rose by 2 per cent in 2018 to £43.48, continuing the steady upward trend noted since miaTouchstone started tracking rates in 2015.

The outlook for the year ahead is also promising, according to results of the miaTouchstone survey. Overall enquiry levels were up by over 10 per cent in 2018 indicating the industry’s positive growth could continue into 2019.

Venues in the South West and East Midlands were among those with the highest rate rises. Both regions saw an increase of 20 per cent in their DDR rates in 2018 while residential rates rose around 25 per cent

Average 24-hour residential rates reported by the mia member venues to the online benchmarking tool also rose by 2 per cent in 2018 compared to those in 2017 with the latter months showing a bigger uplift.

While rates rose, so too did the average number of meetings. Despite an immediate drop off in activity levels following the EU Referendum in 2016, the industry bounced back to experience 12 per cent growth in 2018.

Mia chief executive Jane Longhurst said: “The miaTouchstone results indicate that 2018 was a good year for most participating mia members. To see growth in many areas, particularly DDR, is testament to the hard work of mia venue members in providing an excellent service to their customers and is especially noteworthy against the backdrop of a challenging economy.

“It is also heartening to see that confidence in the business meetings and events market is high for the year ahead, although everyone is aware that the UK’s proposed exit from the EU at the end of March could change that.

“MiaTouchstone’s review of enquiry levels is always a key indicator of prospects going forward, particularly in the current volatile climate, and this will be a key measure for mia members to watch over the next six months as the UK economy adjusts to a ‘post-Brexit’ world.”