Horwath International recently presented the 2002 Worldwide Hotel Industry Study. As is the tradition for more than three decades…
Horwath International recently presented the 2002 Worldwide Hotel Industry Study. As is the tradition for more than three decades, this study presents detailed financial, marketing and operating trends for full-service hotels in various regions and segments of the worldwide hotel industry. The cooperation between the International Hotel & Restaurants Association, Smith Travel Research and Horwath International made it possible to utilize approximately 700,000 rooms worldwide in this publication.
WORLDWIDE RESULTS
The worldwide hotel industry experienced an average occupancy rate of 63.5% in 2001, a decrease of 4.1% point compared to the prior year. This decrease is basically attributed to the dramatic impact of September 11th terrorist attacks. Still, the average daily room rate worldwide decreased only slightly, from US$ 91.77 in 2000 to US$ 91.62 in 2001. As a result of the decreased occupancies, the annual RevPAR (Revenue Per Available Room) also decreased, from US$ 38,872 to US$ 35,320. Since costs did not decrease with revenues, the income before fixed charges expressed as a percentage of total revenues decreased from 33.2% to 29.0%. Expressed in US$ per room, IBFC dropped by more than 20%, down to US$ 10,256 in 2001.
COMPARISON BY REGION
While all regions of the world were confronted with decreased occupancy rates in 2001, some were hit harder than others. The strongest decreases were seen in South America (8.1%), Asia (6.8%) and North America (6.3%). Other regions fared slightly better, with Africa and the Middle East suffering a decline of 4.4%, Europe dropping 1.9% and Australia and New Zealand dropping only 1.8%.
As a result of the strong decline in Asia, hotels in Australia and New Zealand can now claim the highest occupancies, at an average 67.2%. South America sees its occupancies drop even further below those in other regions, now dangling at 50.6%.
Average daily rates comparisons show different results, with increases in South America and Europe, and decreases in all other regions. The strongest decrease in ADR was seen in Australia and New Zealand, where it dropped from US$ 85.08 to US$ 74.69. Highest ADR`s worldwide are still achieved in North America (US$ 104.47).
Combining the results for occupancy and average daily rate, we can conclude that hotels in Europe were best able to withstand the downturn in the hotel industry, with only a slight drop in occupancies and a strong increase in ADR. As a result, the RevPAR in European hotels actually increased by 8.3%, while it decreased in all other regions. The strongest decrease was in Australia and New Zealand, where the strong decrease in ADR resulted in a drop in RevPAR of 14.5%.
COMPARISON BY COUNTRY
According to the results of the Worldwide Hotel Study, the most profitable place to operate a hotel appears to be Hawaii. With an average occupancy of 72.1% and an ADR of no less than US$ 198.41, hotels here easily outperform all other areas. The lowest results are achieved in Hungary, where occupancy is 54.7% but ADR is as low as US$ 34.20. Highest overall occupancies are achieved in Hong Kong: 78.5%.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
