September attacks have hit hotels hard, says Andersen
The events of 11 September have hit the hotel industry hard, causing occupancies to fall by up to 21%, says a new survey from consultancy Andersen.
According to Andersen, most European gateway cities saw occupany falls of more than 10% during September, when compared with September 2000.
The overall impact on revenue per available room (revpar) was mixed. London and Paris were worst hit, with declines of 21% and 20% respectively.
But a decline in performance was already evident in the year to August, with occupancy down by more than 5% in Athens, Amsterdam, London, Madrid and Zurich.
Airport hotel markets in Europe were hardest hit, with revpar performance in September falling dramatically. All the major airport markets saw occupancy declines in September, with Frankfurt in Germany seeing the worst drop of 18%.
Munich airport hotels recorded a 26% drop in revpar, as both occupancy and average room rate declined. The situation was made worse by a drop of about 1.5 million in the number of visitors to the city's Oktoberfest, between 22 September and 7 October, compared with last year.
The Middle East, which was experiencing mixed performance until August, with markets in the Gulf and Egypt ahead of 2000, has seen a massive decline in occupancy since 11 September. Occupancy in Jerusalem fell by 67.4% in September compared with the same period last year. Tel Aviv and Amman showed similar declines.
The Asia Pacific regions of Hong Kong, Sydney and Singapore were also hit by occupancy declines of 18%, 21% and 14% respectively. But Andersen added that the decline in Sydney's occupancy rates also reflected high occupancies during the Olympic Games last year.
In the UK, Andersen highlighted London as being worst hit by the decline in visitor numbers following the attacks on the USA last month, with luxury hotels being most affected.
According to the report, hotels with an average room rate of more than £110 showed a fall in revpar of 25% or more compared with September 2000. Mid-range and budget hotels fared better, with revpar down by an average 12% on September 2000. The smaller decline was attributed to a greater reliance on UK domestic and European traffic.
In the regions, provincial UK hotels saw a 4.3% increase in revpar for the year to August, despite the impact of foot-and-mouth during the first six months of the year. Preliminary results for September indicate that although occupancy is down by 1.8%, a similar increase in average room rate has left revpar comparable to last year.
Regional markets have been less affected by the downturn in visitors and more affected by the cancellation of events such as the Ryder Cup and a reduction in the length of the Labour Party conference in Brighton, said Andersen.
Nick Van Marken, partner in Hospitality Consultancy Services at Andersen, said he expected the decline in business to begin to slow in November.
"Because the underlying health of the European hotel industry is generally more robust, we believe hoteliers are in a better position to weather what is hopefully a short-term crisis," he said.
