By Cheryl Cole Trade picked up for hotel operators in the last quarter of 2000, reflected i...
By Cheryl Cole
Trade picked up for hotel operators in the last quarter of 2000, reflected in industry share prices that rose an average 20% during the first two months of this year. It's a welcome period of outperformance for a sector that has
fallen around 20% in the past four years compared with a UK market that has risen almost 50%.
The outlook for 2001 looks less optimistic. In March prices fell back because of the prospect of a slowdown in the US, weak demand and, in particular, last week's poor performance of global stock markets. Accor, Hilton and Millennium & Copthorne all have a presence in the US and have been reporting some fall-off in US bookings.
Others in Europe say there has been limited decline in the number of bookings or none at all. However, brokers' analysts feel this may
be set to change during the second half.
Overall London had a strong 2000 aided by a buoyant banqueting and conference market. It was also assisted by the fact that few new hotels opened and US and Far East visitor numbers increased. During the third quarter, room yields were up 13.6%.
Hilton's hotels delivered a consistently strong performance throughout 2000. This was because of an extensive refurbishment spend, the rebranding of Stakis and excellent trading from its London sites.
Oversupply in the provinces took the shine off Hilton's rural estate and will continue to affect most budget operators, however, analysts anticipate yields will exceed 5% for the full year.
The market is now expecting capacity growth in the region of 2% for 2001. This limited supply should help maintain yield growth for the coming year.
The big worry now is the impact of foot and mouth, which no one can yet predict.