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 more likely to impact hotel development, financing and operations over the following three hundred and sixty five days.
Among one of the most crucial for the industry, in step with Ernst & Young:
Finance: For the hospitality industry, 2013 can 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 speculate limited resources.
Hotel companies also are watching how one can restructure and reposition for tax purposes, with some again contemplating IPOs for REIT transformation which will 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 lots of opportunities inside 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 around the globe, new project announcements have risen to the top 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 inside the upper end of the market and among select service brands appealing to the worth 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 reminiscent of Nigeria, Gabon and South Africa, for expansion. Globally, most markets experienced steady growth in 2012, with the notable exception of Europe, where economic challenges has been, and remain, the best.
Commenting at the report, global hospitality services leader Michael Fishbin, said:
“Hospitality companies continue to judge 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; in this case, those companies shall be inside the strongest position to further capitalize at the upturn available in the market.”