The Conference Board Consumer Confidence Index® declined marginally in August, following August’s rebound. The Index now stands at 135.1 (1985=100), down from 135.8 in August. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – increased from 170.9 to 177.2. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined from 112.4 last month to 107.0 this month.
“Consumer confidence was relatively unchanged in August, following August’s increase,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved further, and the Present Situation Index is now at its highest level in nearly 19 years (Nov. 2000, 179.7). Expectations cooled moderately, but overall remain strong. While other parts of the economy may show some weakening, consumers have remained confident and willing to spend. However, if the recent escalation in trade and tariff tensions persists, it could potentially dampen consumers’ optimism regarding the short-term economic outlook.”
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was August 16.
Consumers’ assessment of current-day conditions improved in August. The percentage of consumers claiming business conditions are “good” increased from 39.9 percent to 42.0 percent, while those saying business conditions are “bad” decreased from 11.2 percent to 9.8 percent. Consumers’ appraisal of the job market was also more favorable. Those saying jobs are “plentiful” increased from 45.6 percent to 51.2 percent, while those claiming jobs are “hard to get” declined from 12.5 percent to 11.8 percent.
Consumers were moderately less optimistic about the short-term outlook in August. The percentage of consumers expecting business conditions will be better six months from now decreased from 24.0 percent to 21.9 percent, while those expecting business conditions will worsen increased from 8.4 percent to 10.0 percent.
Consumers’ outlook for the labor market was also slightly less positive. The proportion expecting more jobs in the months ahead decreased marginally from 19.9 percent to 19.7 percent, while those anticipating fewer jobs increased from 11.1 percent to 13.6 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement decreased from 24.9 percent to 23.8 percent, however, the proportion expecting a decrease declined, from 6.6 percent to 5.8 percent.
Source: August 2019 Consumer Confidence Survey®
According to the Hawai‘i Hotel Performance Report published by the Hawai‘i Tourism Authority (HTA), statewide RevPAR increased to $259.52 (+5.2%), with ADR of $304.73 (+3.9%) and occupancy of 85.2 percent (+1.0 percentage points) in July.
HTA’s Tourism Research Division issued the report’s findings utilizing data compiled by STR, Inc., which conducts the largest and most comprehensive survey of hotel properties in the Hawaiian Islands.
In July, Hawai‘i hotel room revenues grew by 3.5 percent to $434.8 million, approximately $14.6 million higher than last year. There were approximately 27,700 fewer available room nights (-1.6%) in July with room demand similar to 2018. Several hotel properties across the state were closed for renovation or had rooms out of service for renovation during July.
All classes of Hawai‘i hotel properties statewide reported RevPAR gains for the month of July 2019. Luxury Class properties reported a strong increase in RevPAR to $506 (+11.0%) with ADR of $603 (+3.7%) and occupancy of 83.9 percent (+5.5 percentage points). Midscale & Economy Class hotels reported RevPAR of $155 (+1.7%) with ADR of $183 (+0.4%) and occupancy of 84.3 percent (+1.0 percentage points).
Among Hawai‘i’s four island counties, Maui County hotels led the state in RevPAR at $359 (+9.3%), ADR of $436 (+7.7%) and occupancy of 82.2 percent (+1.2 percentage points). Maui County was led by the strong performance of properties in Wailea, which earned RevPAR of $640 (+13.6%), ADR of $697 (+12.2%), and 91.7 percent occupancy (+1.1 percentage points).
O‘ahu hotels reported higher RevPAR in July of $230 (+1.4%) compared to a year ago, with growth in ADR to $261 (+1.3%) and occupancy that was similar to last year at 87.9 percent (+0.1 percentage points). Waikīkī hotels performed similarly to last July.
Hotels on the island of Hawai‘i saw increases in RevPAR to $223 (+19.0%), ADR of $266 (+9.1%) and occupancy at 83.6 percent (+7.0 percentage points) in July compared to the same time last year. Most notably, Kohala Coast hotels had a 30 percent increase in RevPAR to $324 compared to last July, along with strong growth in ADR to $376 (+10.7%) and occupancy of 86.3 percent (+12.8 percentage points). In May 2018, Kīlauea volcano started erupting in lower Puna, which contributed to a downturn in visitors to the island of Hawai‘i in the following months.
Kaua‘i hotels reported lower performance compared to last July with decreases in RevPAR to $233 (-5.7%), ADR of $301 (-3.0%) and occupancy of 77.5 percent (-2.2 percentage points).
Tables of hotel performance statistics, including data presented in the report are available for viewing online at: https://www.hawaiitourismauthority.org/research/infrastructure-research/
About the Hawai‘i Hotel Performance Report
The Hawai‘i Hotel Performance Report is produced using hotel survey data compiled by STR, Inc., the largest survey of its kind in Hawai‘i. The survey generally excludes properties with under 20 lodging units, such as small bed and breakfasts, youth hostels, single-family vacation rentals, cottages, individually rented vacation condominiums and sold timeshare units no longer available for hotel use.
The data has been weighted both geographically and by class of property to compensate for any over and/or under representation of hotel survey participants by location and type. For July 2019, the survey included 159 properties representing 48,092 rooms, or 89.0 percent of all lodging properties with 20 rooms or more in the Hawaiian Islands, including full service, limited service, and condominium hotels.
Properties report rooms as officially out of service to STR if they are unavailable for rent for 30 days or more. However, it should be noted that rooms out of service for renovation for less than 30 days are still included in the Supply numbers presented in Figures 2 and 4 and may be considered overstated.
Bermuda Royal Gazette – August 16 2019.
For the past three years or more, the one bright spot in the Bermuda economy has been the tourism industry.
Helped by the publicity surrounding the 35th America’s Cup and a tightly focused digital marketing strategy, visitor arrivals and the other key tourism indicators showed strong growth from 2016 on after years of decline.
Bermuda was helped by some external factors as well. The US economy has continued to grow strongly through this period. Bermuda’s immunity from the Zika virus has also been good in the babymoon and young family market.
The Bermuda Tourism Authority has deservedly received a great deal of credit for the success of the past three years. But the worry now is that the growth may be flattening or declining.
This week’s tourism figures show that the total number of air visitors has fallen by 2.6 per cent and 3.3 per cent in the second quarter and first half of the year respectively. The BTA rightly puts its focus on “leisure visitors”, excluding business visitors and people visiting friends and family; here the numbers are slightly worse — down 3.6 per cent for the second quarter and 5 per cent for the first six months of the year.
The BTA’s other key number is visitor spending, and rightly so — one visitor coming to Bermuda and spending a hypothetical $10,000 is more valuable to the economy than four visitors spending $2,000 each for a total of $8,000.
Here the news is more encouraging. Although this newspaper has doubts about the accuracy of departure surveys, both face-to-face and online, as an exact measure of visitor spending, they do at least show a trend, and, in fact, visitor spending increased by 2.4 per cent to $96 million in the quarter and by 1.4 per cent to $130 million for the half-year.
It should also be acknowledged that cruise visitors are again up by 15 per cent, and indeed, overall visitors are up by 8.5 per cent, so all is not lost. But cruise passengers spend vastly less than air visitors on island, and the economy’s future depends on growth in air visitors.
Finally, a key statistic in measuring the health of tourism lies in the hotel occupancy and revenue figures. In contrast to the overall spending figures, hotel revenue numbers are down, as are room occupancy statistics.
So, too, were the number of people staying in “the Airbnb sector”, where the number of guests was down by 2,000 people or 18 per cent.
Despite that, the picture for tourism is not as gloomy as the headline numbers suggest. Nonetheless, there are reasons for concern, especially if the trend continues for the rest of the year.
So, what has happened? The BTA has pointed out that American Airlines cancelled its midday flight from New York last year and has not restored it.
The loss of the flight has resulted in a projected drop in air capacity from New York of 14 per cent. For the first six months of the year, the drop in the number of New York residents visiting Bermuda is down 12 per cent. Visitors from most other major gateway cities — Boston, Philadelphia, Washington and Atlanta — are up, in many cases significantly.
While there may be other factors influencing this, the drop in air visitors from New York City almost exactly mirroring the cut in airlift from the same city cannot be ignored. The message is obvious: the more aircraft seats, the more visitors. The challenge is in convincing the airlines that Bermuda can fill the seats if they put more aircraft on the routes.
This will not be easy. Apart from airlines’ boom-and-bust tendency to add too much capacity to already popular destinations and then cut back too far when yields unsurprisingly fall, the US airline industry faces a shortage of both airport gates and aircraft — this has been exacerbated by the grounding of the Boeing 737 Max fleet.
It may also be that 2019 is something of a natural correction year for tourism; many people, the BTA included, expected arrivals to fall in 2018 in the wake of the America’s Cup, but the year turned out to be a record-setter. It’s also possible that the glow of publicity around and after the America’s Cup is now fading, and as a result Bermuda is falling off some of the hot destination lists and must-see destinations for 2019 and 2020, having been a staple on them in 2017 and 2018.
This may be especially true for the 24 to 35-year-old age group — defined by the BTA as adventure seekers — where arrivals have dropped some 14 per cent in the first six months of the year after surging in 2018.
Many in this age group are from New York, and it may be that, apart from being deterred by higher airfares from that city, their notoriously short attention span and insatiable hunger for new experiences means that perhaps Bermuda’s time as flavor of the month has passed. That does not mean Bermuda should give up on this segment — the idea that Bermuda must attract this age group and encourage them to keep coming back as they get older is the right one, just as it has always been — but it does suggest you can never take your eye off the ball.
Bermuda is also experiencing a decline in group business, which makes it harder to fill rooms as the large resort hotels now have space for leisure visitors. This may also be part of the reason for the drop in Airbnb numbers.
More than anything else, Bermuda needs more visitor rooms if the tourism recovery is to continue. Despite the travails of Caroline Bay, there is room for optimism.
In January, Azura, the former Surfside, will open its first phase with 46 rooms. The Bermudiana Beach Resort, on the site of Grand Atlantic, will open its first phase next spring with 70 of a projected 110 rooms. It will be managed by Hilton with its massive loyalty programme — an enormous worldwide market will be available.
Then the long-awaited St Regis has announced it will open in 2021. That is great news for St George’s and Bermuda, and it is good to see optimism around after many years of negativity and doomsaying.
Now the island must make sure it gets the rest of its offering to visitors right: sufficient airlift, a new airport, accessible — in all senses of the word — and flexible transport, appealing entertainment and activities, and, above all, superb and friendly service.
The past three years have shown that Bermuda can have a vibrant and viable tourism industry. There are still internal and external risks — what if the US economy goes into recession on the heels of a Trump trade war? Building on the success of 2016 to 2018 will not be easy, but it can and must be done.
Dominic Dudley Contributor Forbes Magazine
(August 6 2019)
Signs of strain in Dubai’s tourism industry – one of the critical parts of its economy – are growing, with a $15bn hotel building boom taking place against a backdrop of plateauing visitor numbers.
Among the indications of difficulty, the local Emaar Properties reported a sharp drop in revenue from its hospitality business in the first quarter of this year, with the figure falling by 14% to AED388m ($105.7m) (exchange rate 3.67 AED = US$ 1.00).
And in late July Bloomberg reported that Dubai-based Jumeirah Group – which operates the iconic Burj Al-Arab hotel as well as numerous other properties around the city – was cutting 500 staff.
Such issues find echoes across the industry as a whole. According to data provider STR, supply has outgrown demand in Dubai’s hotel sector for the past six quarters and the industry is now in its worst shape for at least a decade.
Hotel occupancy levels fell in the second quarter of this year to 67% — the lowest figure for that part of the year since 2009, according to STR. The average daily room rate was down 12% to AED 513.73 while revenue per available room fell 13% to AED 344.65 – the lowest level for both metrics since 2003.
Despite the weak market conditions, hoteliers have been adding more and more rooms in anticipation of the Expo 2020 world fair, which is due to start in October next year and last six months. The authorities in Dubai say they are hoping for 25 million visits to the fair, but it is not clear how much extra demand there will be for hotel rooms as a result.
Of the anticipated visits, some 11 million will be by people living in the UAE, most of who will presumably not need a place to stay. Of those coming from overseas, the majority of visits will be by people who had planned to come to the UAE anyway and who will fit a visit to the Expo site into their itinerary.
If there isn’t a surge of additional visitors, there will be a lot of empty hotel rooms around the city. Over the past year alone, 27 new hotels have opened their doors, adding close to 8,000 rooms. More keep being added. Emaar alone plans to open five more hotels in Dubai this year, increasing its portfolio by some 1,373 rooms.
Real estate consultancy Jones Lang LaSalle (JLL) says there were 123,200 hotel and serviced apartment rooms in the city as of the end of June this year, with 1,100 rooms added in the second quarter. Another 18,400 rooms are due to become available in the second half of the year, with the total number of rooms reaching 155,900 by the end of 2021.
In its most recent report on the UAE property scene, JLL suggested the health of the Dubai hospitality market in the medium-term hinges on the success of Expo 2020. “Further declines in performance are expected over the next 12 months, before the hotel market recovers on the back of strong visitor arrivals growth associated with Expo 2020,” it said.
At the moment, visitor numbers to Dubai are flat. According to the latest data from Visit Dubai, total international guest numbers in the first five months of the year stood at 7.16m, the same as 2018. Visitor numbers from some key markets have declined. India, the largest source market, provided 486,000 visitors in the first five months of the year, down 12% year-on-year. Iranian visitor numbers have slumped by a third to 130,000. Those losses have been countered by rises in visitor numbers from the likes of Saudi Arabia, China and Germany, but even so the industry is racing to stand still.
Just as troubling is the fact that the average length of stays is edging downwards, falling from 3.6 nights last year to 3.5 nights this year, according to Visit Dubai.
It is not just a question of visitor numbers and lengths of stay. According to data from HotStats, labor costs for hoteliers have also risen over the past year, as have food and beverage costs, hurting hotel operators' profit margins.
Passenger numbers coming through Dubai International airport have also shown signs of weakness, falling 2.2% in the first quarter of this year compared to the same period last year. Emirates Airline, the most important carrier at the airport, reported growth of just 0.2% in passenger numbers in its latest annual report, to 58.6 million. It’s smaller, no-frills rival FlyDubai saw passenger numbers grow by just 1% last year to reach 11 million.
Dubai has set itself a target of attracting 25 million visitors by 2025 (last year it attracted 15.9 million over the whole year). It is unclear if it will be able to inject enough momentum into its industry to reach that target, but a lot is riding on its ability to do so. The value of hospitality projects underway in Dubai is $14.7bn, according to MEED Projects.
All of this is happening in a context of low economic growth for the UAE as a whole. According to the IMF, the country’s economy grew by 1.7% last year, but the non-oil economy grew by just 1.3%. Dubai’s GDP performed better, with a 1.9% rise to AED398bn, according to the Dubai Statistics Center, but the emirate’s non-oil trade has barely grown in recent years and its stock market was the world’s worst performing bourse in 2018.
The economic situation has not been helped by the ongoing geopolitical tension in the region, not least in terms of the threats to shipping passing through the nearby Strait of Hormuz. The UAE has taken a notably cautious position on that, pushing for more dialogue with Iran and softer rhetoric in a bid to calm things down, even sending a delegation to Tehran last month for talks on maritime security. The authorities in the UAE clearly don't want to risk adding to the pressure on their economy.
Marriott International Launches All-Inclusive Platform To Bring Its Brands, Scale And Trusted Service To Growing, Global Vacation Segment.
Marriott International is poised to grow in the all-inclusive segment by leveraging its Bonvoy travel program and iconic brands including The Ritz-Carlton and Westin Hotels & Resorts.
Marriott International to manage five all-inclusive resorts with more than 2,000 rooms and owner investment of more than $800 million.
BETHESDA, Md., Aug. 5, 2019 /PRNewswire/ -- Responding to consumers' growing desire around the world for premium, worry-free vacations, Marriott International, Inc. today announced it is launching an all-inclusive platform to serve this increasingly popular vacation segment. The company also announced that it has signed management contracts with hotel developers who plan to build five new all-inclusive resorts, investing more than $800 million and demonstrating their confidence in Marriott International's scale, loyalty platform and operational expertise. The resorts are expected to open between 2022 and 2025.
A rendering of Nia, the planned all-inclusive destination with four Marriott International brands including The Ritz-Carlton and Westin Hotels. It is set to rise in Riviera Nayarit on Mexico’s West coast.
"Our new all-inclusive resort platform is a natural progression for Marriott International," said Tony Capuano, Marriott International's Executive Vice President and Global Chief Development Officer. "It will provide the ownership community a game-changing value proposition for their luxury and premium resort projects around the world, while providing guests a new vacation option with brands they trust."
Marriott International plans to further expand its all-inclusive portfolio in popular, leisure destinations worldwide with a mix of new-build properties and conversions of existing resorts, including properties currently in the Marriott International portfolio. The new platform will provide the company's 133 million Marriott Bonvoy members the option to earn and redeem points for this convenient, pay-one-price concept.
More than 2,000 rooms in the works.
Marriott International's newly signed management contracts are expected to deliver five all-inclusive properties in the Caribbean and Latin America that, combined, would offer more than 2,000 rooms. The planned resorts include:
Punta Cana, Dominican Republic
"We are thrilled to be working with Marriott International to create a first-of-its-kind, exciting vacation destination in Mexico's Riviera Nayarit that will feature four of the company's distinct brand experiences," said Gerardo Férnandez, Managing Director, Hospitality Platform, Artha Capital. "By bringing together a mix of premium and luxury brands on our beautiful, oceanfront site, we have the opportunity to redefine what 'all-inclusive vacationing' truly means. We have high confidence in Marriott International, the power of its brands and loyalty program, and are confident that this project will be a success."
"We are thrilled to be developing an all-inclusive Autograph Collection resort in the Dominican Republic in collaboration with Marriott International," said Mihail Popov, CEO of DIT Hotels, based in Sofia, Bulgaria. "Working with Marriott International means we have access to its brand, design and business expertise as we develop our resort in Punta Cana, and once we open, we'll benefit from the company's operational excellence and base of enthusiastic Marriott Bonvoy members who are always seeking out new experiences."
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.