Global hotel industry likely to withstand headwinds in 2023
By Arjay L. Balinbin, Multimedia Editor
THE global hotel industry will remain resilient and continue its recovery in 2023, thanks to the resurgence of international travel, according to an industry expert.
For 2023, “we see global recovery,” Mark Willis, global chief executive officer of Fairmont Hotels & Resorts, told BusinessWorld earlier this month.
“Yes, there has been a lot of negativity around a possible global recession and a return to 2008-2009 (global financial crisis), but that has been an ongoing discussion for some months… For the most part, it’s been delayed and delayed, and I wonder if it will come because most of the locations around the world are recovering,” he said.
The global hospitality had an “uplifting year” in 2022, driven by leisure demand and various international tourism events such as the World Expo Dubai, Formula One Grand Prix and FIFA World Cup, according to real estate services company JLL.
In its “Global Hotel Investment Outlook 2023” report, JLL said occupancy rates have recovered around the world. For instance, occupancy rates in the Americas have recovered to 95% of the pre-pandemic levels, while those in Europe and Asia have regained 89% and 77%, respectively.
“The industry has bounced back after an appalling period. I don’t think anybody was hit as hard as the travel and hospitality sector,” Mr. Willis said.
Pent-up travel demand is expected to remain resilient in 2023, JLL said, “particularly as China and other international borders reopen and consumers consistently demonstrate a desire to travel.”
“Inflation, cost of goods, cost of payroll…, and power… have all been elements of business that have been under a lot of pressure in the past 18 months,” said Mr. Willis.
Although hotel rates have gone up, demand has also gone up, he noted.
“Supply has slowed down a little as we come through COVID, and there is a desire to travel, particularly from those locations that have been under lockdown.”
In the Philippines, travel agencies are likewise expecting international visitor arrivals to approach pre-pandemic levels.
International visitor arrivals will reach seven million this year, Michelle G. Taylan, chair of the Philippine Travel Agencies Association’s 30th Travel Tour Expo 2023, told BusinessWorld last month.
The Department of Tourism has set a target of at least 4.8 million tourist arrivals this year. While this is below the 8.26 million foreign arrivals in 2019, it is still an improvement from the 2.65 million international arrivals in 2022.
Despite the economic challenges, Fairmont’s Mr. Willis is confident that the luxury hotel brand will “remain strong.”
“The brand is wonderfully strong; it’s a heritage brand with a hundred-year-plus history,” he noted.
Fairmont is part of Accor, a global hospitality group that operates in more than 5,000 locations across 110 countries. The Fairmont Makati celebrated its 10th anniversary earlier this month.
Mr. Willis said that Fairmont is set to open more than 30 hotels in the next 36 months, nine of which will be in Asia.
“If you have the right product, the right service, and you can personalize what you are doing and reach and exceed people’s expectations, people are prepared to pay a fair price for that,” he added.
Mr. Willis is responsible for the luxury brand’s portfolio of more than 100 hotels in operation and under development globally. Prior to taking the helm at Fairmont, he was the chief executive officer for India, Middle East, Africa and Turkey at Accor, overseeing a portfolio of more than 520 hotels in operation and development across 20-plus diverse brands.
The goals for Fairmont include modernizing or digitalizing its processes, as well as “making sure that you are attracting the next generation… and that they are coming, utilizing and enjoying our fabulous portfolio of hotels.”
