I suppose it should come as no surprise that as we managed to talk ourselves into a recession, we will now go through the process of talking ourselves out of it. There was a time in 3Q ’07 when the media went through a hilarious period of trying to convey that we might be heading for recession without daring to say the word (“Northern Rock gets bank bail out” from the BBC). It was almost as if they were playing a game to see who would blink first and actually come out with it, but once it happened, there was an absolute blizzard of articles telling us that we were heading into a massive downturn (“Britain on the brink of first recession in 16 years” from the Daily Mail). You have to wonder what effect that had on the many thousands of investors who queued outside the Northern Rock bank waiting to get their money out even when the government had guaranteed their savings.
Fast forward two years and the reverse is happening. According to many news channels, France, Germany and even Japan are now ‘out of recession’. Really? Does one-quarter growth of 0.3 percent and 0.9 percent, respectively, mean that they are out of recession, especially as the government has borrowed to spend almost US$260 billion to fund a finance package? By the way, that money—the US$260 billion—is just Japan; it doesn’t include what France and Germany have spent.
So what effect has that had, if any, on the hotel performance in those countries? Looking at year-to-date figures, demand in Japan is down 15 percent, France 16 percent and Germany 12 percent. Personally, I feel that a more accurate measure of whether we are out of recession or not would be to look at when hotel demand numbers go up and prices start to rise. That will show that businesses are confident enough to invest in travel again and take their feet off the brake.
I suppose that at this stage every little helps, and if publishing headlines like that gets the ball rolling and creates the effect of making people more confident, then great. I just wonder how much impact the competition for a good story has on consumer confidence and whether we need to exercise that power a little more responsibly. It did, after all, have a huge effect the other way just a few short months ago.