BERLIN—When the data wranglers are getting optimistic, that’s something to talk about.
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| Mark Lomanno shared optimism during his presentation at IHIF. |
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“It’s the first time in 18 months when I have a genuine sense that things are going to get better,” said Mark Lomanno during Tuesday’s general session at the International Hotel Investment Forum at the InterContinental Berlin.
Indeed, demand in Europe and Asia/Pacific increased for the four months ending January 2010 when compared to the same period ending January 2009 (the beginning of the downturn). Europe saw a 0.9-percent increase, and Asia Pacific saw a 9.1-percent increase in demand.
“There is still reluctance to embrace (demand) and raise room rates,” Lomanno, the chairman of STR Global, said of average daily rate growth. “It’s going to be up to hoteliers to say, ‘Do we have trust that demand is coming back enough to accelerate rates?’”
Thus far, pricing behavior in Europe has not followed traditional supply and demand philosophy, he said. There is a variance in weekday and weekend demand that is not reflected in weekday and weekend ADR.
“This means that pricing behavior was similar, hoteliers didn’t differentiate the discounts for weekend versus weekday business,” Lomanno said. “There should have been a slight differential. … It’s a pricing phenomenon that the industry has embraced.”
Other takeaways:
- London was the only key European market to experience occupancy growth during 2009. No major market saw ADR growth.
- Paris ended 2009 with ADR of €167 (US$226.70) and revenue per available room of €123 (US$166.98), the highest of the key European cities.
- European rooms in-construction are focused in the United Kingdom, Germany and Russia, which comprise 53 percent of the in-construction pipeline.
- In 2010, London is the only key market that will see positive RevPAR change (0 to 10 percent) when compared to 2008 figures. Edinburgh, Scotland; Glasgow, Scotland; and Istanbul are forecasted to see a decrease of 0 to 10 percent.
