The financial/ economic crisis and the European hospitality industry By Marguerite Sequaris, CEO of HOTREC 1
Contents I. Brief introduction to HOTREC II. The crisis and the hospitality industry III. Some data IV. Call upon European Institutions 2
I. Brief introduction to HOTREC Represents hospitality industry at European level 40 National Associations in 25 European countries 3
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 4
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 5
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 6
III. Some data European economy GDP: by 1,5% compared to 3rd quarter 2008 Unemployment (January 08 January 09) from 6,8% to 7,4% in EU27 from 7,2% to 8,0% in Euro area 7
III. Some data (cont d) Confidence in European economy Drop in Economic Sentiment Indicator (Dec 08 -Jan 09) ESI down: by 3,3 points in EU27 by 1,5 points in Euro area Biggest decline registered in services sector (-4,9) - Especially with regard to evolution of demand 8
III. Some data (cont d) UNWTO World Tourism Barometer International tourist arrivals World Europe On average between 2004 and 2007 +7% no data January to June 2008 +5% +3,4% June to December 2008-1% -2,5% In 2008 (thanks to 6 first months!) +2% +0,1% Europe with worst performance in 2008! 9
III. Some data (cont d) UNWTO World Tourism Barometer Prospects for 2009 for the world stagnation for Europe stagnation or slight decline (-1% to -2%) or -3% 10
III. Some data (cont d) Deloitte & Touche Hotel performance: 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% 11
III. Some data (cont d) Deloitte & Touche Prospects: 2009 a challenging year for hoteliers Hotels to see fewer room nights at lower prices 12
III. Some data (cont d) Rescue programmes at national level Baltic states - Increase of VAT (from 5% to up to 21%) - Bankrupcy of Lithuanian airlines fewer direct flights Spain: Plan renove turismo - Facilitating investments - Subsidised interest rates - Grace period 13
IV. Call upon European Institutions HOTREC calls for a re-assessment by the Commission of its working programme Letter to President Barroso Review of working programme and working methods "Survival" calls for reducing burdens to a minimum! 14
IV. Call upon European Institutions (cont d) Letter to the Commission Redirecting development of measures away from "red tape" or additional burdening of enterprises e.g. food labelling proposal 15
IV. Call upon European Institutions (cont d) Letter to the Commission Stricter application of "better regulation" policy e.g. impact assessment to food labelling: "no systematic research answered the question of how much such a provision would cost" 16
IV. Call upon European Institutions (cont d) Letter to the Commission Stricter application of "better regulation" policy avoid duplication e.g.: smoking: - DG SANCO - DG Employment study on hotel safety: - EP - DG SANCO 17
IV. Call upon European Institutions (cont d) Letter to the Commission More respect of subsidiarity principle e.g.: smoking forum on nutrition forum on alcohol 18
IV. Call upon European Institutions (cont d) Similar demands are addressed to the EP in relation to "red tape" "better regulation", in particular - business impact assessment - duplication of work "subsidiarity" 19
IV. Call upon European Institutions (cont d) Overall objective 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 employeesare at stake 20
Thank you for your kind attention! www.hotrec.eu 21