The Hotel Times - March 2008 - (Page 12)

COVER STORY: EUROPEAN UPDATE Developers feeling effects of the U.S.-led credit crunch as deals are taking longer to close. Conﬁdence remains strong in Europe, despite ﬁscal tightening and slower demand. Gabriele Burgio, chairman and c.e.o. of NH Hotels, is expecting a strong 2008 for NH Hotels, including the Hotel NH Central Convenciones in Sevilla, Spain, (above) and Hotel NH Constanza in Barcelona. Continued from page 11 “It is increasingly becoming imperative for luxury hotel providers to build a great range of services, which means more operating costs,” Dardenne said. “Spas, which are integral to luxury hotels, are labor intensive and have higher staffing requirements.” Russell Kett, managing director at HVS International, said the outlook for the European hotel industry still is strong in many markets, especially in those that do not overly rely on U.S.-led demand for occupancy. In February 2008, the effects of the U.S.-led credit crunch started to work their way through to the European hotel sector. “Deals are taking longer to close, especially those over $100 million,” he said. “Demand is still strong in many European markets, so occupancy levels have yet to see a major reaction.” European hoteliers are waiting to see what happens in the United States. Daniel Poser, managing director of LR Hotels, London and regional properties, said there are well-documented, significant structural issues in the U.S. economy that have had significant impact on the international finance and banking market. “Hotel values are likely to have peak- ed in many markets in 2007,” Kett said. “It is important to remember that Europe is not one single, homogenous market. Some markets move faster than others; some will continue to show growth in 2008, while others will contract.” Gabriele Burgio, chairman and c.e.o. of NH Hotels, said Europe continues to be a stable region, and while economists point to fiscal tightening and slower demand, confidence remains strong. “Of the world’s top 10 tourism destinations, seven are in Europe and more than half of the world’s travelers crossed Europe’s many borders,” he said. “The gates have yet to be fully opened between China’s enthusiastic tourists and the rest of the world, and many of these new travelers will undoubtedly have their sights set on Europe.” “Tourism continues to be the driving force of the hospitality sector,” Dardenne said. “According to the United Nations World Tourism Organization’s World Tourism Barometer, international tourism arrivals grew 6 percent in 2007 to 898 million international tourist arrivals.” Central and Eastern Europe are predicted to be emerging markets in 2008. Hudspeth said Russia is sought after because NH HOTELS Continued on page 14 12 The Hotel Times March 2008 www.TheHotelTimes.com http://www.TheHotelTimes.com

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The Hotel Times - March 2008 Business Outlook Editorial Outlook Contents Conference Preview Capital Outlook What's Driving Growth? European Outlook Development Outlook Fractional Outlook Branding Source List Insurance Outlook Brokers Update Brokerage Outlook Lodging's Balancing Act Transactional Facts Lending Outlook Lenders Source List In Closing

The Hotel Times - March 2008

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