Ernst & Young has released Global Hospitality Insights: Top thoughts for 2013, its annual outlook for the global hospitality industry.
This year’s publication highlights several key trends prone to affect hotel development, financing and operations over the subsequent one year.
Among the foremost crucial for the industry, in step with Ernst & Young:
Finance: For the hospitality industry, 2013 shall be shaped by an emphasis on controlling costs in any respect levels of the business in addition to maximizing capital. This may mean continued deferral of overdue maintenance spending and the scaling back of capital improvement projects, as owners decide where best to take a position limited resources.
Hotel companies also are watching the right way to restructure and reposition for tax purposes, with some again contemplating IPOs for REIT transformation so they can both reduce the general tax burden and in addition unlock value of their real estate. At the investment front, despite increased regulatory hurdles and constrained capital in certain markets, global private equity and sovereign wealth funds will find quite a few opportunities within the sector.
Cities: Increased infrastructure spending by city governments, especially in rapid transit to facilitate the movement of travellers from airports to downtown locations, seems to be paying off, as a brand new class of stylish travellers flock to statement-making urban hotels, many offering luxury and upper tier amenities to guests.
Development: While access to financing continues to be difficult in lots of markets all over the world, new project announcements have risen to the best level in 18 months, reflecting cautious but growing optimism among investors and hotel brands within the trajectory of the worldwide economy.
Look for brand new hotels to rise in both emerging markets and prime downtown urban locations. New construction is additionally expected in all market segments, particularly within the upper end of the market and among select service brands appealing to the price conscious traveller.
Markets: Africa may be the next major focus for global hotel brands, as more investors target sub-Saharan nations rich in natural resources comparable to Nigeria, Gabon and South Africa, for expansion. Globally, most markets experienced steady growth in 2012, with the notable exception of Europe, where economic challenges were, and stay, the best.
Commenting at the report, global hospitality services leader Michael Fishbin, said:
“Hospitality companies continue to guage the capital agendas and concentrate on the very basics in their businesses – maintaining stability and creating operational efficiencies.
Owners, investors and executives of hospitality assets who sufficiently addressed their capital needs and the changing preferences of guests witnessed an improvement in operating fundamentals over the process the year; hence, those companies would be within the strongest position to further capitalize at the upturn available in the market.”