Dear Insiders,
The annual OEHV Congress was this year one of the most political for a long while as it sought to cement the demands of Austrian hoteliers. The new young Federal Chancellor, Sebastian Kurz, was also in attendance. He was cooperative, promised to repeal the VAT increase from 2016 and, amongst other things, installed the new department "Sustainability and Tourism". Whether this will solve hotel-sector specific problems faster remains to be seen. In a country like Austria with its large tourism sector, the question of staff recruitment remains a core issue.
All the same, operators and investors are not deterred: Bed giants such as Marriott and Motel One are now also storming the small city of Innsbruck. The local matadors are working out their best poker strategy here. Fred Fetter summarises the OEHV Congress and the background to the developments in Innsbruck for us.
After we last week described what over-tourism looks like, specifically in Mallorca and Latin America, our second article today focuses on cruise ships. They spew out thousands of passengers into ports and cities for just a few hours and have been identified as a major problem. The smaller the destination, the worse it is. They don’t benefit the locals at all. Studies are already putting prices on the damage and are recording the global suffering of the destinations. Yet a solution to the problem appears to be a challenge for everybody.
It can only end in a limit on the tourist numbers. Last Sunday, I experienced over-tourism first hand at the Grand Palace in Bangkok. Already at 9 o'clock in the morning, the large courtyards will packed full with loud tour groups, the limitless selfie-mania of the visitors slowed all progress through the grounds, which is why by 9:30, the first tourists began to sit themselves down on the steps in the shade of the temple. What a scene!
Whether Innsbruck or Bangkok: It’s booming everywhere. And wherever overcapacity has not yet arrived, it will soon be created – because it will continue to boom. The sector is focusing only on economies of scale, profit maximisation and displacement competition. In 2008, irrationality and greed were just as pronounced as today. And the current super performance figures from the global hospitality sector will only fan this behaviour further. All regions apart from the Middle East boomed in 2017.
Now that HNA intends to sell its stake in NH, Sarah Douag has taken a closer look at HNA's problems. Airbnb remains on track for growth, though in the background things are crumbling, currently in its home town San Francisco. And the Italians are meanwhile analysing what the new financing law has brought them.
Yesterday, Deutsche Hospitality officially confirmed Thomas Willms as CEO. The long-standing Starwood top manager started last June in Frankfurt as COO. hospitalityInside.com predicted this leap seven months ago.
This and more in a new colourful edition today, with a look at the broader picture.
Yours, Maria Puetz-Willems, Editor-in-Chief
Your opinion? maria@hospitalityInside.com
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