A survey of 261 European hotel executives has revealed a worse-than-expected outlook for the hospitality industry with 79% of respondents predicting hotel chain bankruptcies in the next 12 months. Four in 10 hotel executives anticipate that more than five chains will go into administration in the next year.
A survey of 261 European hotel executives has revealed a worse-than-expected outlook for the hospitality industry with 79% of respondents predicting hotel chain bankruptcies in the next 12 months. Four in 10 hotel executives anticipate that more than five chains will go into administration in the next year.
According to the DLA Piper 2009 Europe Hospitality Outlook Report released this week at the International Hotel Investment Forum, European hospitality executives are less optimistic about the health of their industry than their US counterparts. Only 39% of European hotel executives expect the industry to recover in 2010, compared to 59% of US hotel executives. Over half of European executives (52%) do not expect a recovery until 2011.
Respondents cited two main reasons for their level of pessimism - the inability to raise capital in the current market (43%) and the struggling European economy (33%).
However, for well-capitalised investors there are opportunities in the current market - eight out of 10 respondents recognise the 'good' buying opportunities, with the economy/budget hotel sector representing the most attractive investment opportunity. The majority of respondents - 71% - also regard investment in sustainable hotel development as a long-term trend.
'Given the current economic climate it comes as no surprise that the majority of European hotel executives are decidedly bearish about the health of the industry,' said Karen Friebe, global co-chair of DLA Piper's Hospitality and Leisure practice.
