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According to the report, Global Hospitality Insights: Top Thoughts for 2011 – released yesterday by Ernst & Young, a series of financial, operational, demographic and regulatory trends suggest that global hospitality markets will see more robust, broad-based growth by the end of this year.


While the industry has suffered two years of declining fundamentals and endured the drag of a global economic recession, we believe that the worst is over and the light at the end of the tunnel is not only visible but growing larger each day,” said Michael Fishbin, Leader of Ernst & Young’s global hospitality practice. “Lodging sector recovery is a fact; resurgence is no longer far away,” he added.

Countries like Russia, China, Brazil and India will propel global hospitality market growth not only over whole 2011 but furthermore - over the next few years. In addition to the booming growth of the middle class in these countries, Brazil and Russia also have the added impetus of hosting not one, but two global sporting events each in the next seven years: Brazil hosts the FIFA World Cup in 2014 and the Summer Olympics in 2016; Russia hosts the Winter Olympics in 2014 and the FIFA World Cup in 2018. As an example of the impact on local hotel markets, more than 300,000 people visited South Africa last summer to attend the 2010 FIFA World Cup with almost two-thirds of those visitors entering the country for the first time and spending the equivalent of more than US$500 million during a four-week period.

One scenario Ernst & Young expects to see in 2011 is the return of opportunistic investors to the hotel sector. Several recent surveys of the hotel investment sector have been bullish, with most observers anticipating occupancies, ADR and net operating income returning to peak levels in 2012, 2013 and 2014, respectively. With these fundamentals improving, investors are likely to want to lock in deals before the numbers get too good and prices rise, the report suggests.

Source: hospitalityNet

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