IHIF: Economists concerned about European economy but bullish on hotels

4 Mar, 2013 By: Stephanie Ricca


From left: Thierry Malleret, managing partner, The Monthly Barometer; David Fenton, senior economist, RBS; and moderator Michael O'Hare, managing director of Horwath HTL for Hungary and Russia.

BERLIN—While the global economic climate remains cloudy, speakers at the opening day of the International Hotel Investment Forum said hotel developers and operators should be optimistic—particularly if they focus on the right properties in the right markets.

The 16th annual IHIF drew nearly 2,000 attendees from 71 countries to the InterContinental Berlin this week.

Economists set the stage with some not-quite-rosy outlooks for the European economy in general, though they were quick to point out that the hotel and travel industry will fare better than some.

“I can forecast that the future will be very dificult and it will be tough to navigate the waters ahead, but luck plays a dominant role and I think we’re lucky to be in the travel and tourism industry,” said Thierry Malleret, managing partner of The Monthly Barometer. “This is an industry that will benefit from the mass effect of so many [middle-class] travelers coming abroad.”

Still, Malleret did characterize the global economic future as “an era of permanent disequilibrium.” However, he pointed out that the companies and entrepreneurs who can adapt and react quickly to the new normal of a complicated, transparent business environment will emerge successfully.

While what he called “an implosion of the Euro zone” did not happen, Malleret said the pace of economic recovery will remain weak this year. Tail risks are reduced, particularly as central banks discontinue their intervention around the world, and emerging markets will outperform developed countries.

David Fenton, senior economist with RBS, called the European recovery “sluggish and stuttering,” mostly due to low consumer confidence and high debt. The current 12 percent unemployment rate across the Euro zone is particularly troubling, he said, and cost controls will remain in place across all industries moving forward.

Despite those figures, Fenton said he is bullish on the hotel industry. “Whatever the situation in Europe, the UK and the US, let’s not lose sight of the fact that these still are the wealthiest countries in the world,” he said. “Growth may be harder to come by but that’s not the worst thing in the world.”

He said the challenge for these three regions is to let go of the notion that continuous, fast-paced growth is mandatory.

“Worry about your own business and what you can do to drive a sustainable competitive advantage,” he advised.

Malleret shared some optimism as well, particularly related to hotel transactions. “The Eurozone is a region that has significant shock absorbers,” he said. “It’s a great time to invest, particularly in Greece and particularly if you are cash-positive.”

Watch for continuing coverage of the IHIF this week here and on Twitter at @IHIF_News and #IHIFBerlin.


Topic : IHIF, Investment, Transactions
External Source : Hotel Management

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