From laughter to tears… ? | By Vanguélis Panayotis
In this electoral period where predictions range from devastating to transformative futures, depending on which side emerges victorious, it is natural to wonder about the foreseeable consequences for the hospitality community.
At a time when Germany is striving to regain its lost growth and industrial power, and the United States is increasing its appeals to investors seeking favorable conditions, France, once the world champion of attractiveness, has once again shot itself in the foot.
With operating conditions tightening and the financial climate becoming tense, the triggering of legislative elections and the uncertainty surrounding the next executive tandem have not helped matters for operators or investors.
Instability is the market’s worst fear. Across all sectors, deals are on hold. Some will no longer be completed, while others will be delivered under updated conditions.
You might argue that the hospitality industry will once again demonstrate its resilience and 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 more favorable fundamentals than other classes, which are currently struggling. However, the new market conditions could jeopardize this still fragile appreciation.
There will inevitably be life after the institutional crisis, just as there was after the health crisis. If we want to be resolutely more optimistic and confident, we must view this as a transitional phase that will open a new cycle with 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 quickly. Overall, if operators anticipated the start of a market turnaround, they were foreseeing promising results for the summer and autumn.
Today, the landscape is darkening. Average prices are struggling to stay high, occupancy rates are trying to catch up with purchasing power, corporate travel spending is obviously restrained, construction is in need of sites and 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 similar to the post-Covid rebound. The pot of milk is placed on the fire: let’s remain vigilant and responsive.
If the Olympic Games project a good image of the country, a weakened euro further encourages the arrival of international visitors, and realism and pragmatism prevail over populist promises, the engines of the rebound would not be extinguished.
We must hope for a more peaceful climate to avoid sinking into melancholy and prevent the expected Olympic laughter from turning into tears of lost opportunities.
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