Move over – Doha, Hanoi and Istanbul make an entrance
2005 results from the HotelBenchmark™ Global Ranking Index
For the third consecutive year Venice held on to its crown as the best performing market in terms of revenue per available room (revPAR), according to the HotelBenchmark™ Global Ranking Index (GRI). The GRI compares the performance of 165 global cities outside North America on an annual basis.
Europe’s dominance of the ranking remained strong during 2005, securing 11 of the top 20 positions in the revPAR GRI. Despite three European cities dropping out of the top 20 – Athens, Edinburgh and Dublin. Istanbul was a new entry securing 20th place, as revPAR in the city grew 43% in 2005, fuelled by a substantial increase in visitors and the city hosting the Formula 1 Motor Racing Championship for the first time.
The Asia Pacific region stole six places in the top 20 revPAR GRI. Of these, Taipei made a comeback in 16th place, after dropping out of the rankings in 2003, while Hong Kong SAR remained the only Chinese market in the top 20 in 10th place.
Markets in the Middle East claimed the remaining three top 20 positions, with Doha making a spectacular appearance in 6th place. Doha has experienced phenomenal growth in average room rates – up 65.7% to US$199 since 2004. This growth has attributed to the city moving up an impressive 64 places in just five years. Dubai climbed eight places, securing second position behind Venice, while Kuwait City dropped to 12th place.
Interestingly, when looking at the top 20 markets in terms of occupancy, the Global Ranking Index paints a completely different picture, with only seven markets appearing in the top 20 for both revPAR and occupancy. Abu Dhabi took the coveted top spot in the occupancy GRI – overtaking Dubai – however its performance is something of an anomaly because new supply is excluded from the analysis.
Asia Pacific markets dominated the occupancy GRI once again, taking 13 spots. Hanoi made its debut entry, securing 3rd place. Since 2000 Hanoi has seen occupancy rates grow 117%. Although this growth comes from a low base, it is still a remarkable accomplishment, achieved through improving service quality and effective tourism campaigns.
Commenting on the results, Julia Felton, Executive Director of HotelBenchmark™ at Deloitte said: “The first half of this decade has thrown some serious challenges to the hotel industry, and any one of them could have had a long lasting impact. However, the industry has been remarkably resilient and after each knock seems to gather more strength. Although the continuing threat of terrorism remains, the fact that more than 800m international visitor arrivals were recorded last year confirm that people are still prepared to travel. The continued expansion of the airline industry – in particular budget carriers – has made many more destinations more accessible than ever before.
Consequently, there are now 16 new cities that rank in either the revPAR or occupancy GRI top 20 that did not feature five years ago. Most of these are Asian and the Middle Eastern cities, as both regions have experienced a massive growth in tourism arrivals that have contributed to substantial improvements in hotel performance.”
She concluded: “Although we are generally optimistic about the future of the hotel industry, there are three major uncertainties that still remain. Terrorism is still with us, but so far, although personal suffering caused by the atrocities has been enormous, the impact on business has been short and sharp. There is still the issue of rising energy prices and how hoteliers will balance the need to increase rates against dampening customer demand. Finally, avian flu, which originated in Asia, appears to be moving into Europe at an alarming rate. While to-date there is no evidence that travel patterns are being impacted, the industry remains hopeful that this will not be the next challenge it has to face.”
Other main findings
• London dropped five places to 8th position in the revPAR GRI following the July underground and bus bombings.
• Athens fell from its acclaimed 13th position in the revPAR GRI, when it hosted the Olympic Games in 2004 to 53rd place.
• Moscow enjoyed its fourth year in the top 20 revPAR GRI. It has the highest revPAR growth of all the top 20 cities since 2000 and has increased its ranking by one place over 2004.
The full results of the 2005 HotelBenchmark™ Global Ranking Index will be published in the next HotelBenchmark™ Update – Global Performance Review which will be launched at the Berlin Hotel Investment Conference on 6 March 2006. A complimentary copy of the publication will be available to all survey contributors on-line in the Members' Area from next Monday. Alternatively to order your copy at a special rate, simply email HotelBenchmark@deloitte.co.uk to find out more.
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The HotelBenchmark™ Survey contains the largest independent source of hotel performance data outside of North America and tracks the performance of over 6,500 hotels and 1.2 million rooms every month. Monthly surveys are produced on the following areas:
• Four regional rate and occupancy surveys covering Asia-Pacific, Europe, Central & South America and the Middle East & Africa.
• Twelve country/sub region rate and occupancy surveys for Australia, Benelux, China, Germany, India, Italy, New Zealand, Nordic Countries, Qatar, Southern Africa, Spain and UK.
• Two city rate and occupancy surveys for London and Paris.
• Monthly profitability surveys on Germany and London.
• On an annual basis we produce profitability surveys tracking performance across all regions of the world.
• Daily HotelBenchmark™ tracks rate and occupancy everyday for over 20 markets across the UK, Europe and the Middle East. Coverage continues to build rapidly since launch in early 2005.