Transcript Document

The financial / economic crisis and
the hospitality industry
by Ákos Niklai
Member of the
HOTREC Executive Committee
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Prague, 10 June 2009
Contents
I. Brief introduction to HOTREC
II. The crisis and the hospitality industry
III. Some data
IV. Recovery at EU level
V. Recovery at national level
VI. Conclusions
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I. Brief introduction to HOTREC
 Represents
hospitality industry
at European level
 40 National
Associations
 in 25 European
countries
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I. Brief introduction to HOTREC
(cont’d)
European hospitality sector
 1.6 million enterprises
 9 million persons employed
automotive production + sales + servicing: 6.3 million
agriculture: 10 million
 163 billion EUR value added
chemical sector 170 billion EUR
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I. Brief introduction to HOTREC
(cont’d)
European hospitality sector
 99% of enterprises employ < 50 people
 these 99% make up 62% of value added
 92% of enterprises employ < 10 people
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II. The crisis and the hospitality
industry
In a nutshell:
Crisis combined with
confidence
Direct impact on industry





business travels
business events (congress, seminars...)
private trips/outings
search for cheaper prices
cost of credit
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III. Some data
European economy (EUROSTAT)
GDP: 1st quarter ‘09
compared
in EU 27
in Euro area
to 4th quarter ‘08
to 1st quarter ‘09
by 2,5%
by 2,5%
by 4,4%
by 4,6%
Unemployment (March ’08 – March ’09)
in EU27
from 6,7% to 8,3%
in Euro area
from 7,2% to 8,9%
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III. Some data (cont’d)
Confidence in the European economy
(European Commission)
Economic Sentiment Indicator (ESI)
(Feb ’09 - April ’09)
ESI
by 0,6 points in EU27 (at 60,3 pts in March)
by 3,5 points in EU27 (at 63,9 pts in April)
(long term average =100 points)
Indicator increasing for the first time over 2 years
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III. Some data (cont’d)
UNWTO World Tourism Barometer
International tourist arrivals
WorldEurope
On average between 2004 and 2007
January to June 2008
June to December 2008
In 2008 (thanks to 6 first months!)
+7% < 5,0%
+5,7% +3,4%
-1,7% -2,8%
+1,7% +0,0%
Europe with worst performance in 2008!
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III. Some data (cont’d)
UNWTO World Tourism Barometer
International tourist arrivals
WorldEurope
On average between 2004 and 2007
+7%
January 2008 – January 2009
February 2008 – February 2009
-6,6% -5,4%
-8,8% -11,2%
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< 5,0%
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III. Some data (cont’d)
UNWTO World Tourism Barometer
Prospects for 2009 (as of January 2009 – still maintained)
for the world
for Europe
 stagnation
stagnation
 or slight decline (-1% to -2%)
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or -3%
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III. Some data (cont’d)
Hotel performance in EU (2008)
 Occupancy: 69,3% (2007) down to 66,9% (2008)
- most affected: Prague, Rome, Dublin (~ -9,5%)
- no European capital in +
 Average room rate: stagnation
 RevPAR: -4,2%
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III. Some data (cont’d)
European Travel Commission
Hotel performance in EU
January – February 2009 (vs. same period 2008)
Occupancy
10%
Average daily rate
10%
RevPAR
20%
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III. Some data (cont’d)
Hotel performance in EU
April 2008 – April 2009
Occupancy rate
68,9%
59,4%
Average daily rate
15%
RevPAR
27%
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III. Some data (cont’d)
Reports by some associations
Budapest first 3 months in 2009 (vs. same period 2008)
Room nights
20%
Revenue
30%
RevPAR (5* )
40%
Restaurant revenue
40%
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III. Some data (cont’d)
Reports by some associations
Prague first 3 months in 2009 (vs. same period 2008)
Room occupancy
RevPAR
18% ( at 39%)
20-30%
Situation of restaurants: 30% to close down in ’09-’10
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III. Some data (cont’d)
Reports by some associations
France - hotels: (Jan ’08 – Jan ’09)
Occupancy
3,3%
Restaurants:
Turnover
20-50% (depending on region)
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III. Some data (cont’d)
Reports by some associations
Spain hotels
Occupancy
15%
RevPAR
20%
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III. Some data (cont’d)
Reports by some associations
Spain restaurants
Employment
60.000 jobs lost over12 months
Rev. (Jan’08 – Jan’09)
5,2%
Rev. (Feb’08 – Feb’09)
9,7%
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III. Some data (cont’d)
Reports by some associations
Portugal
Rev. (Jan, Feb ’08 – Jan, Feb ’09)
5,2%
Nights (Jan, Feb’08 – Jan, Feb’09)
9,7%
Prediction for 2009:
10-20%
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III. Some data (cont’d)
Reports by some associations
Ireland
Occupancy
2007
2009 (forecast)
64%
54%
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III. Some data (cont’d)
EUROBAROMETER survey (20 March 2009)
On holiday plans of consumers
• 27 000 consumers interviewed
• in February 2009
• in the 27 EU countries
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III. Some data (cont’d)
EUROBAROMETER survey
On holiday plans of consumers
Main results:
• Impact of changes in cost of living on holiday plans
- 1/3 some impact on holiday plans (out of which for 38% this
meaning not to take holidays at all)
- 1/3 no impact
- 1/4 no change in cost of living (the rest: no answer)
• Where to save?
- 15% would save on accommodation
- 23% would go rather in low season
- 23% would save on restaurant spending (30% on shopping)
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IV. Getting out of the crisis
How soon ?
3 possible scenarios
or
or
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IV. Recovery at EU level
“Yes, Europe has the unity, the confidence
and determination to win this battle”
Commission President José Manuel Barroso
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IV. Recovery at EU level (cont’d)
 Succession of meetings of EU heads of State or
government since October
 3 main lines of actions:
 promoting financial stability in order to re-build
confidence
 getting the real economy back on track
 staying united against the crisis and working
together at global level
 2 levels:
 EU
 national
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IV. Recovery at EU level (cont’d)
Example of general measure
 European Investment Bank
€ 30 bn available for loans to SMEs
via commercial banks
at favourable interest rates
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IV. Recovery at EU level (cont’d)
Example of measure
specific for the hospitality industry
 Change in VAT rate system – came into effect on 1
June 2009!
All Member States are allowed to apply
a reduced VAT rate to restaurant services
(before only 11 of them were allowed to do so)
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V. Recovery at national level
Responses to crisis vary greatly!
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V. Recovery at national level
VAT – good examples
•
from 17,5 to 15% in general (UK)
•
from 19% to 9% on restaurant services (CZ)?
•
from 19,6 to 5,5% on restaurant services (FR)?
•
from 21% to 6% on restaurant services (BE)?
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V. Recovery at national level
VAT – bad examples
•
from 5% to 9% on hotels (Estonia)
•
from 5% to 19% on hotels (Lithuania)
•
from 5% to 21% on hotels (Latvia)
•
from 20% to 25% on hotels and restaurants (Hungary)
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V. Recovery at national level
VAT rates for hotels on 1 January 2008
20
19
IT
SK
AT
19
10
RO
13.5
10
EL
IE
9
CZ
12
9
SI
SE
8.5
9
8
NL
FI
BE
7
FR
PL
PT
7
5
MT
ES
5
LV
7
5
LT
BG
6
5
5.5
6
5
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DK
HU
UK
LU
0
CY
3
EE
8
15
DE
17.5
25
VAT rates for hotels in EU-27 as of 1 January 2008
22 Member States applied a reduced VAT rate
V. Recovery at national level
VAT rates for hotels on 1 July 2009?
25
25
DK
19
SK
IT
19
AT
DE
10
RO
13.5
10
EL
IE
9
CZ
12
9
SI
SE
8.5
9
8
7
PL
NL
7
BE
ES
FR
7
PT
BG
6
5
5.5
6
5
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UK
CY
LT
EE
LU
0
LV
3
MT
8
9
FI
15
15
19
21
HU
VAT rates for hotels in EU-27 as of 1 July 2009??? (vs. 1 January 2008)
20 Member States to apply a reduced VAT rate?
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V. Recovery at national level
VAT rates for restaurants on 1 January 2008
VAT rates for restaurants in EU-27 as of 1 January 2008
20
HU
22
25
20
BG
SE
19.6
FR
25
19
SK
DK
19
RO
21
19
DE
18
MT
19
18
LV
CZ
18
18
EE
LT
17.5
IT
13.5
AT
IE
10
EL
12
10
SI
PT
8.5
9
8
7
PL
CY
7
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FI
NL
LU
0
BE
3
6
ES
15
UK
11 Member States applied a reduced VAT rate
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V. Recovery at national level
VAT rates for restaurants on 1 July 2009?
25
25
DK
SE
19
19
RO
SK
20
19
DE
18
19
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FI
BE
HU
BG
FR
CZ
MT
LV
LT
EE
NL
LU
0
UK
3
5.5
6
9
IT
13.5
AT
IE
10
EL
12
10
SI
PT
8.5
9
8
7
PL
CY
7
6
ES
15
15
18
21
22
25
VAT rates for restaurants in EU 27 as of 1 July 2009??? (vs. 1 January 2008)
14 Member States to apply a reduced VAT rate?
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V. Recovery at national level
Other measures
• Increase in budget for marketing (e.g. Prague, Austria,
Greece)
• Subsidised credit for the industry (e.g. Austria, Portugal,
Spain)
• Abolishment of the bed-tax, special support for seasonal
hotel enterprises, reduction of the landing fees (Greece)
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VI. Conclusions
Overall objective of the industry
EU and 27 Member States are to create the conditions for
 economy to recover
 growth to florish
 employment to redeploy
Survival of the 1.6 million enterprises as well as
the future of 9 million employees are at stake
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VI. Conclusions (cont’d)
• New European Parliament
• New European Commission
 Strengthened recovery plan? Need of:
• further facilitation of credit for businesses
• reduction of charges to businesses
• creative solutions for keeping/increasing skills
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Thank you for your kind attention!
www.hotrec.eu
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