From laughter to tears… ?
In this electoral period where everyone is predicting a devastating or transformative future, regardless of which side emerges victorious, we are entitled to wonder about the foreseeable consequences for the hospitality community.
At the very moment when Germany is chasing its lost growth and its industrial power; and while the United States is increasing its appeals to investors in search of favorable conditions, France, yesterday world champion of attractiveness, has once again shot itself in the foot.
It was not enough for operating conditions to tighten and the financial climate to become tense; the triggering of legislative elections and the uncertainty hanging over the next executive tandem did not help matters for either operators or investors.
Instability is the markets’ worst fear. All sectors combined; deals are on hold. Some will no longer be done, others will be delivered under updated conditions.
You will tell me, hospitality will be able, once again, to demonstrate its resilience and its ability to overcome challenges. But is it necessary to test its shock resistance at this point? For institutional investors, the sector has earned its stripes as a major asset with much more favorable fundamentals than other classes, which are currently struggling. But the new market conditions could put an end to this still fragile good appreciation.
There will inevitably be life after the institutional crisis, as there was after the health crisis. If we want to be resolutely more optimistic and confident, we must experience it as a transitional phase which will open a new cycle and its share of opportunities.
During the recent Hospitality Operator Forum, we recalled the cyclical nature of our industry and its propensity to unfold these cycles more and more quickly. Overall, if operators anticipated the start of a market turnaround, they are foreseeing – were foreseeing – their hope of good results on a promising summer and autumn.
Today the landscape is getting darker, with average prices struggling to stay at the top, with occupancy rates struggling to catch up with purchasing powers, with obvious restraint in corporate travel spending, with construction in need of sites and fewer workers to accommodate…. The cycle is ready to plunge back into uncertain lows.
The best we can hope for is a short and rapid turnaround, or even a stabilization of activity values as during the post-Covid rebound. The pot of milk is placed on the fire: let's remain vigilant and responsive.
If ever the Olympic Games project a good image of the country; that a weakened euro further encourages the arrival of international visitors; that realism and pragmatism end up winning out over populist promises, the engines of the rebound would not have been extinguished.
We must hope for a more peaceful climate so as not to sink into melancholy, nor go from the expected Olympic laughter to the tears of lost opportunities.
