Multi-year recovery along with new opportunities for the travel and hospitality sector, predicts HVS Global Senior Management

Mandeep Lamba, President (South Asia) HVS ANAROCK, said occupancies across India were likely to return in Q3 2022 and RevPAR to return in Q2 2023

HVS Global Senior Management, Global recovery, Hotel recovery, Hotel news, Mandeep Lamba, President (South Asia) HVS ANAROCK, Occupancy

HVS Senior Management across globe hosted a webinar to offer expert perspectives on key hospitality topics including how the Covid-19 pandemic has impacted their respective regions, the kind of recovery hoteliers can anticipate, as well as the long-term changes the sector is likely to see.

Opened by CEO Stephen Rushmore and moderated by HVS London Chairman Russell Kett, the webinar also included a straw poll, in which 51% of the over 1,800 global participants said they expected RevPAR [rooms revenue per available room] to return to pre-Covid levels during 2023, with a further 23% anticipating a return in 2024. 

In addition, 35% of the audience expected hotel values to return to 2019 levels in 2023, with 28% estimating a return in 2024.  Getting corporate and group business back emerged as the single most important issue for 37% of the audience, with 29% most concerned about the return of international visitors.  And, in light of the current hospitality environment, participants demonstrated an optimistic investment approach, with 45% favoring a “hold and buy” investment strategy.

Based on their extensive in-market experience, regional variations for the hospitality sector were voiced by the global HVS Senior Management team during the hour-long Webinar.

For Europe, Charles Human, HVS President Europe, predicted a stop-start recovery, largely due to on-going local lockdowns and the further imposition of travel restrictions. “We expect regional commercial markets such as Germany to start to pick up initially, but gateway cities will be the next challenge – London is a shadow of its former self at the moment,” he said.

Hala Matar Choufany, President Middle East Africa, commented, “Perhaps the good news is that Africa has the potential to recover ahead of the Middle East because it is very dependent on the international market. Its recovery will be tied to air traffic and connectivity, whereas in the Middle East, few cities have diversified so they are heavily dependent on the corporate segment.”

Hok Yean Chee, HVS President Asia, anticipated a slow 2021 for Asia, with recovery in 2022-23 and RevPAR levels returning to 2018-19 levels in 2024.  Similarly, Mandeep Lamba, President (South Asia) HVS ANAROCK, said occupancies across India were likely to return in Q3 2022 and RevPAR to return in Q2 2023. “It’s going to be leisure and mid management hotels that will lead the recovery here.  Our knight in shining armor in India is going to be the domestic traveler and everyone is going to start focusing on them like they have never done in the past.” he said.

Rod Clough, HVS President, Americas was more upbeat, expecting recovery in 2021 and into spring 2022, resulting from travel demand. “While we have a few difficult quarters ahead, we expect an unleashing of demand next summer into a good recovery period in the fall of 2021. In the US, people want to be travelling to meetings and conventions and meeting colleagues. As a society, travel is in our DNA and the desire for travel is getting stronger,” he stated.

While the recovery was anticipated to take several years across the world, HVS executives expected a continuation of global hotel development. Explained Rod Clough, “Next summer when things are coming back we will need hotels in new neighbourhoods and in emerging destinations. The train has slowed but it’s still moving forward.”

Hok Yean Chee also anticipated hotel development would continue in China, although costs were likely to rise due to the need for a different design with social distancing becoming a new consideration. “In China and Indonesia there is a lot of domestic travel prompting demand for more hotels,” she commented.

Europe’s Charles Human was more circumspect. “Land prices [in Europe] will fall which is a help, but that’s not enough to entice developers. Those under construction will continue but in some areas the pipelines are too big, so a slowdown won’t be such a bad thing,” he said.

Hala Matar Choufany, HVS President, Middle East & Asia, said she expected development in her region to continue, but that it would take a different shape as developers assess supply and demand. In speaking of the changing nature of corporate and MICE [meetings, incentives, conferences, and exhibitions] travel, she said “there will always be an element of face-to-face corporate travel but things will change – we have to accept that and quantify it. There is no way we will go back to the old days of corporate and MICE travel – particularly as corporations now have limited budget for it.”

Charles Human was more bullish about the return of corporate travel. “Zoom works in pandemic times but not in normal times,” he said, “sometimes remote meetings can be very unsatisfactory. I do believe there will be new opportunities for hotels though, in particular in the restaurant space with so many restaurants closing. The sector is heading for change and operators will need to adapt to the new world.”

Rod Clough in the US ended on a positive note.  He expects new sectors to emerge as a result of the current environment. “There will be small meetings to facilitate personal interaction – hotels are a beacon for this. We will move into a new world. The hotel industry is made up of innovators.  The industry may look different, but it will emerge innovative and vibrant,” he said.

Most Popular

Newsletter

From the edition

From the magazine