European Hospitality Sector Outlook 2024 - Extended Version

PEP TALK FOR THE END

SOURCES

i https://www.ft.com/content/02924916-ec4b-4ef1-8f7d-0af6d1c67907 ii https://www.ft.com/content/d635d247-bdd4-4036-a2eb-f9907b764adb iii https://etc-corporate.org/news/financial-pressures-shape-europeans travel-plans-in-late-2023-and-early-2024/ iv https://www.siteminder.com/changing-traveller-report/enduring explorer/ v https://stories.hilton.com/releases/2024-trends-report vi https://citydestinationsalliance.eu/citydna-forwardkeys-reveal-a positive-outlook-for-european-destinations-this-q4/?_sm_nck=1 vii https://www.aci-europe.org/downloads/resources/ACI%20 EUROPE%20Airport%20Traffic%20Forecast%20Oct23.pdf viii https://www.mastercard.com/news/insights/2023/navigating-global business-travel/ ix https://www.costar.com/article/677385865/hyatt-ceo-says-hotel demand-is-strong-across-segments x https://irday.marriottinternational.com/presentation?_sm_nck=1 xi https://irday.marriottinternational.com/presentation?_sm_nck=1 xii https://stories.hilton.com/2024trends-business-travel xiii https://www.prnewswire.com/news-releases/deloitte-holiday-travel-is cleared-for-takeoff-301973303.html xiv https://www.businesstravelexecutive.com/news/morgan-stanley research-shows-travel-managers-see-8-travel-budget-hike-in-2024 xv https://www.bbc.com/news/uk-politics-67206459 xvi https://www.sciencedirect.com/science/article/pii/S0160738323000786 xvii Amex GBT used Prophet time series modeling to generate the hotel rate forecasts in Hotel Monitor https://www.amexglobalbusinesstravel.com/the atlas/hotel-rates-by-city/

HOW MUCH IT TAKES TO BELIEVE – FORTUNE FAVOURS THE BRAVE Since the end of the pandemic, the hotel sector has been defying and surpassing expectations. First, being considered epicentres of disease transmission, it was feared that hotels would be unable to recover to the old normal. Then, when the performance surprisingly spiked after the restrictions were lifted in 2022, many attributed this to one-off revenge travel. Yet the positive trend continued in 2023, and with even stronger performance, surpassing 2019 levels, despite the economic, geopolitical challenges and unprecedented cost pressures. Yet, when we look forward to 2024, the sustained growth of hotel performance is being questioned. Yes, there are undeniable headwinds but there

are also several reasons to be optimistic. And if the recent past taught us anything, it is that hotels tend to surprise on the upside. With 2024 expected to be a pivotal year, when interest rates start to decline, economies and values stabilize, hotel transaction activity is likely to revive. However, the shift from a buyer to a seller market may occur quickly. Thus, investors need to remain ready and agile. 2024 may be a good vintage year, but those who snooze may lose.

22 HOTELS OUTLOOK 2024

THE TIDE IS TURNING AMALGAMATED | 23