Hoteliers are confident that their industry will bounce back from the effects of the likely war in Iraq, but they are unsure how quickly that bounce-back will come.
That is the picture emerging from the 6th International Hotel Investment Forum, taking place in Berlin, Germany, today and tomorrow.
“It’s an uncertain outlook, but with solid fundamentals,” said Nick Van Marken, a partner at consultants Deloitte & Touche. While the uncertain economic and political situation meant demand from business travellers for hotel rooms would remain subdued in the short-term, no hotel companies had yet been forced into selling off properties as a result of the downturn, he added.
The industry was also in better shape than it was after the last Gulf war in the early 1990s.
“Post Iraq, the bounce-back could be quite rapid,” Van Marken predicted. There had been a “significant brake” on performance and investment, and once that brake was released, recovery could be swift.
Jean-Marc Espalioux, chief executive of hotel group Accor, said: “I don’t see a good situation, possibly before the end of next year.” But he too pointed to the strong fundamentals of the industry: interest rates were low compared with the early 1990s, and there were no longer too many hotels chasing too few guests. “There was huge over capacity both in Europe and North America and this is not the case today,” Espalioux said.
Laurence Geller, chairman and chief executive of hotel investor Strategic Hotel Capital, was also cautious. When recovery came, he said, it would be in the form of a slow upward curve rather than a sharp spike.
And Le Méridien’s chief executive Jurgen Bartels thought it was impossible to predict when the upturn would come. “I don’t think anybody knows,” he said.