Financial crisis does not affect tourism as severely as expected

The worldwide financial crisis in some cases led to massive losses for hotels and airlines. However, the prospects for next year are not as bleak as many people feared. This is confirmed by a Deloitte study called “Hospitality Vision – European Performance Review”. According to this study, many hotel chains plan to invest and expand. Particularly profitable business seems to be in Turkey and the Ukraine. The number of visitors to Germany grew by 3.3% by August 2008. A market offensive is to increase this number even more in the year 2009.

According to Deloitte, Europe is a very attractive tourist destination. In the year 2007 the number of people visiting Europe amounted to 485 million which is 54% of the total number of tourist travelers worldwide. It is quite surprising that despite the global crisis the number of hotel reservations remained almost unchanged in September 2008.

Within Europe it is the countries around the Mediterranean Sea which attract most tourists. The biggest growth rates, however, for the period from January to August 2008 were registered for central and east Europe. The shooting star of the year 2007 was Serbia where the number of foreign tourists increased by 48.5%. Germany was visited by 24.4 million tourists in the year 2007 which is an increase by 3.6%. In the period from January to August 2008 this number grew once again by 3.3%. In Turkey there are plans for a massive growth of the tourist industry. Currently, Turkey ranks 9th among the world’s top ten tourist destinations. In the Ukraine the number of tourist grew by 22%.

The average revPAR (Revenue per available Room) in Europe increased by almost 11% by September 2008. In September when the financial crisis broke out it fell to 6.7%. The highest revPAR was obtained in Paris (191 Euros), the highest bed occupancy rate was registered in London (81.4%).

Due to the strong Euro hotel rooms became significantly more expensive for tourists from outside the Eurozone. In Berlin prices increased by 6.3% and bed occupancy rate fell by 2.1% by September 2008. As a result revPAR increased by 4% to 62 Euros. However, in view of the 20th anniversary of the fall of the iron curtain, the 60th anniversary of the Federal Republic of Germany and the world athletics championships the situation is expected to improve in 2009.

In the year 2007 investments in European hotels amounted to 21 billion Euros. When the financial crisis broke out this amount fell to five billion Euros. However, the situation is not as bad as it might be. Some investors stopped their investments, others, however continue investing.

In contrast to the hotel industry, prospects for European airlines are rather bleak. Profits are expected to fall from 2.1 billion US dollars to 300 million dollars. Even though the oil price is currently falling, energy prices are expected not to decrease in the long run. Many airlines are therefore cutting flights, use smaller airplanes and do not fly to certain hubs anymore. Market consolidation is expected to accelerate. One positive aspect is an Open Skies Agreement for flights between Europe and the USA. Experts expect 26 million passengers for the five years to come.

The complete study is available for free-of-charge download. GERMAN