Hospitality and Leisure

Industries : Hospitality and Leisure

Travel and tourism is one of the world’s fastest-growing sectors, with bookings hitting close to $1.6 trillion in 2017. A strengthening global economy lies at the heart of industry growth. Each year, the global traveller pool is flooded with millions of new consumers from both emerging and developed markets, many with rising disposable incomes and a newfound ability to experience the world.

Each of the travel segments have unique hurdles to overcome, but driving innovation and exploring new possibilities around the travel experience are some of the challenges that transcend the sectors.

One change from recent years is that corporate car rental prices in North America are expected to rise by as much as 5 percent in 2018 due to operator issues, including higher fleet prices and a downturn in the resale market. While this does not impact travel budgets as much as air and hotel expenses, it is a significant shift compared to recent years when prices dropped.

Southeast Asia currently accounts for about 9% of Asia-Pacific’s online leisure/unmanaged business travel market, and is projected to have a combined annual growth rate (CAGR) of 14% between 2015 and 2020.Travel in Asia is undergoing a significant uprise in growth, both inbound and outbound, and in particular the southeast where motivations and demographics are changing.This growth represents great news for all hotels, given how large the population is in the region. It’s flowing on the back of a rising middle class that includes young, tech-savvy consumers who are eager to travel. Google states more than 70% of Southeast Asia’s population is younger than age 40 and more technologically adept than their parents’ generation.

One of the most vexing dilemmas for corporate procurement and travel departments is hotel rate availability – a problem that will continue into 2018. As hotels become more sophisticated in yield management techniques, business travellers are increasingly unable to find and book rooms at preferred rates.

European hotel transaction volume reached €20.9 billion in 2017. This was an 11% increase compared to 2016 deal volume and surpassed the record level achieved in 2015. This growth was driven by a resurgence in UK hotel investment activity in 2017 and record levels of investment in the Spanish hotel market. The start of 2018 has seen a strong level of investment activity in the UK and Spanish markets. Put together with the continued European and international interest in the German hotel market, we anticipate European hotel transaction volume to moderately increase in 2018 from 2017 levels.

In 2018, Porto leads the growth pack with over 10% RevPAR (revenue per available room) growth anticipated; Amsterdam, Lisbon and Prague could see around 7% RevPAR growth and further robust gains are expected in Milan and Paris. Geneva and Rome are also forecast to see some moderate growth. But the pace of growth is expected to slow in London in 2018, as the weak pound effect fizzles out and a supply spike dampens occupancy. Paris has shown sustained recovery and shares the top spot on the growth chart in 2019 with Lisbon, with around 6.5% RevPAR growth expected for both

The UAE is set to continue its monopoly of the GCC’s luxury hospitality segment for at least the next four years, according to data released ahead of Arabian Travel Market (ATM) 2018.It is expected that, by 2022, the UAE will hold 73% of operating luxury hotel stock.

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