Lodging executives and industry suppliers are seeing a rise in the state of the global industry and they’re buoyed by the potential for an increasingly profitable future. That’s according to attendees at the second annual BITAC® Global representing all regions in the lodging business taking part in a real time poll.
With most of the world’s hotel market becoming increasingly profitable and robust, it’s an exciting time to be a part of the hospitality industry. Developers are developing hotels – the amount of projects under development represented at BITAC® Global is astounding – and operators are seeing gains in occupancy, RevPAR and ADR. Currently, the global hotel industry generates about $460 billion in revenue per year and is expected to rise for the foreseeable future.
It’s a magic moment because emerging markets are seeing major surges of new travelers, which I prompting development, while mature markets like Europe and the United States are seeing ever increasing demand. The United States is even breaking records for all industry fundamentals. Of course there are areas experiencing downward pressure but these markets seem to be the exception proving the rule.
Taking a look at the regions for the last 12 months through April 2014, the Middle East is seeing a 2% increase in occupancy to 67%, 7.2% increase in ADR to $178.93 and 9.4% increase in RevPAR to $119.89, according to STR Global.
Europe saw occupancy rise 1.8% to 68.3% while ADR increased 6.9% to $141.46 as RevPAR rose8.9% to $96.55. Asia saw occupancy increase 1.2% to 68.8% though ADR dropped 2.7% to $118.44 causing a RevPAR decrease of 1.6% to $81.46.
To unearth a deeper understanding of how the hotel industry may respond to future trends, as well as current reality, we utilized our real time polling system to ask our top executive audience made up of participants representing 21 different countries how they see the major issues affecting the global hotel scene.
BITAC® of course is the industry leading one-on-one meetings and relationship building event in the United States and this week’s BITAC® Global is being held seaside in the Mediterranean in Monte Carlo, Monaco, where we’re using cutting edge technology and taking the industry’s pulse utilizing a real time voting system. It gives us the ability to uncover from our worldwide BITAC® Global audience what’s really happening when it comes to critical industry trends at the property and regional levels on a macro basis.
BITAC® Global attendees represent the crème de la crème of the international lodging industry. It’s the ultimate group of global insiders and decision makers all gathered in one place. And they’re all here to come together for the most exciting BITAC® to date to problem solve, network, sign deals and swap their thoughts they believe will move forward the quality of experiences for hotel guests while adding profits to the bottom line.
Today we’re taking a look at the financial state of the industry and the factors driving those successes. Here’s what BITAC® attendees believe about the issues they’re most concerned about and how they see the future playing out:
From what region do you see the largest growth in tourism?
Asia - 55.1%
Middle East - 28.2%
South America - 5.1%
Europe - 9.0%
Africa - 2.6%
Are you seeing an influx of a new middle class of traveler coming to your hotels?
Yes - 89.2%
No - 10.8%
Are you seeing an influx of Millennial generation travelers coming to your hotels?
Yes - 85.0%
No - 15.0%
If you are seeing that Millennial traveler arriving in your market, what type of traveler are they mostly?
Business - 7.9%
Leisure - 17.5%
Business traveler who adds time for leisure - 69.8%
Group - 4.8%
Have you seen an influx in brand development people looking to make sales in your market?
Yes, a lot - 54.5%
Not much yet, but it is picking up - 34.5%
Brands are not a future factor - 10.9%
Do you feel branded hotels are becoming a more critical component to a hotel's success in your region?
It is very important to our success - 46.8%
It is becoming more critical - 37.1%
There is no advantage - 3.2%
Customers are not concerned with brands - 12.9%
How are you feeling about the future state of the global economy?
Bullish - 13.7%
It’s good - 58.9%
Neutral - 11.0%
A little worried - 12.3%
Freaked out - 4.1%
How do you feel about the state of the overall global hotel market?
It’s accelerating aggressively - 47.1%
It’s accelerating modestly - 51.4%
Flat - 0.0%
It’s decelerating modestly - 1.4%
It’s decelerating rapidly - 0.0%
How do you feel about the state of the global luxury hotel market?
Bullish - 24.3%
It’s good - 64.9%
Neutral - 4.1%
A little worried - 4.1%
Freaked out - 2.7%
How do you feel about the state of the global focused-service hotel market?
Bullish - 24.2%
It’s good - 51.5%
Neutral - 24.2%
A little worried - 0.0%
Freaked out - 0.0%
What is your perception of hotel owners’ approach toward raising rates?
Aggressive - 30.2%
Timid - 20.6%
Cautiously Optimistic - 49.2%
How much have you raised your ADR so far in 2014?
1-2% - 13.3%
3-5% - 38.3%
5-10% - 33.3%
10% or more - 15.0%
None - 0.0%