Economy Accommodation in Berlin and Traveling Trends in Europe – Key Trends For 2009

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After briefly examining the global context of traveling trends and accommodation, the article will focus on growth in economy accommodation. Taking Berlin as a case study, it will highlight different types of economy accommodation, which could be part of key growth areas in 2009. The article does not offer ultimate solutions or remedies to guard against the impact of the recession, but it does not hint at certain safeguards which can be undertaken. This text is aimed at accommodation providers and tourist operators, who may not be aware or have the time to sift through some of the more recent tourism statistics. It offers a general, brief overview and a subjective interpretation of the key Tourism trends from 2008 in relation to accommodation / lifestyle & budget Travel.

– IMPACT OF RECESSION ON EUROPEAN BUDGET TRAVEL AND ACCOMMODATION –

We are in the midst of a global recession. The US was hit first followed by parts of Europe. According to UNWTO, The World Tourism Organization who compiled data from the first 8 months of 2008, published in October 2008, the statistics showed a sharp slowdown in growth of international arrivals in recent months and the IPK (World Travel monitor company) pointed to a possible decline of 0 – 2% in 2009. There is however one region that is still booming, the Middle East, where tourism growth in 2008 was up 17%. We could all relocate our travel businesses there, but for those of us that are operating out of Europe and wanting to stay put, being aware of possible implications of the downturn and recent travel trends, is important in making forecasts and decisions for the future.

There is no doubt that traveling trends are fickle and hard to form long-term forecasts from, but they are not only useful indicators, but sometimes have a major impact on the holiday accommodation industry itself. We know that luxury travel has declined, British Airways suffered a 9% decline of its long haul flights and this could have been interpreted as an indicator that luxury accommodation may well also be hit. Indeed, if Mariott International (owner of the Ritz Carlton hotel group) could have taken as a barometer, its third quarter profit in 2008 fell by 28% (The Wall Street Journal digital network). If the prediction of Niel Pedersens, Managing Director of the Supranational Hotels, is right, he foresees that "in 2009 hotel revenues will typically drop 20% with five star market hard hit" (PricewaterhouseCooper). All of these points to 2009 being a very challenging year for high end travel & accommodation. It is within this context that it may be important for the luxury hotel & the entire holiday accommodation sector to re-think ways of strengthening and sustaining areas of their profitable business. The more luxury and middle range hotel providers may not only need to make cuts across the board, for example, but also look at ways of holding on to their existing 'loyalty' customers and make shrewd selective investment decisions. For less high end hoteliers, one method may be to think about ways of re-branding their economy accommodation offers, since it is budget accommodation that many holiday makers are looking for in hard times.

When one looks at the bigger picture, the areas of growth which may arise in the holiday accommodation industry as a whole, may well have an impact even after the recession is over. We do know from the recession of 1993, that budget hotels' turnover actually continued to grow during the recession (PricewaterhouseCooper). Also, in the slump between 2000-2002 the data extrapolated is that only budget hotels experienced increased growth during this period (PricewaterhouseCooper).

– ECONOMY ACCOMMODATION IN BERLIN QUANTIFIED –

Indeed, economy accommodation and budget travel are real potential growth areas in 2009. Economy accommodation is also the theme for ITB's 2009 annual tourist industry convention held in Berlin. As previously mentioned it is the city break to Berlin that I am going to use as case study for the purposes of this article, with particular weight given to guests traveling from British shores.

So, how does one classify economy accommodation? One could go by average accommodation price per night, as compiled by the ITB findings from the Pisa report 2009, as a starting point. Since the average expenditure per night is 101 Euros, anything dramatically lower than this figure could have been translated as the amount a holiday maker would have prepared to pay for economy accommodation. In Berlin an average four-star hotel double room price is 140 Euros (on-line Berlin Time Out guide) whereas a double room in a Berlin hostel, the traditional economy style accommodation in the Circus Hostel, would cost around 56 Euros, (based on on 2 people sharing a double room). And in a 2 star Berlin hotel such as the Ibis Hotel, travelers pay up to 75 Euros per night (based on 2 people sharing a double room). Typically, a budget boutique Berlin hotel, like Arotel, would cost on average approximately 100 Euros (based on 2 people sharing a double room – price quoted as the average amount per night from a 3 day booking from March 13th – 16th 2008)

The traditional style economy accommodation such as the youth hostel is the most popular form of budget accommodation, especially in Berlin. However, other areas to consider for the future growth are more niche style budget accommodation.

-BERLIN HOLIDAY APARTMENTS – EXAMPLE OF NICHE STYLE BUDGET ACCOMMODATION IN BERLIN-

Indeed, niche style accommodation such as branded budget boutique hotels and holiday apartments have been increasingly popular since the 1990's. These types of accommodation are not only very much in vogue and a more stylish spacious alternative to that of a hotel or hostel, but also great value for money. The holiday apartment is an alternative option to a hotel for a family looking for flexible, spacious accommodation, giving them the option of say preparing their own lunch or evening meal and thereby increasing their spending money. For the business traveler the vacation rental is also a good option. Berlin, for example, is a city that attracts business people associated with the entertainment / media sector rather than say investment bankers. This category of traveler is more likely to be attracted to good value stylish Berlin holiday apartments. Equally, the contemporary holiday apartment, is attractive to the type of couples who would have been used to spending money on say a boutique Berlin hotel. The boutique style holiday apartment is a great alternative as it offers them the charm and design flair that they are looking for at a price that does not tear the purse strings away. Guests looking to stay in a stylish Berlin holiday apartment, studio size, for example, could book through Be-My-Guest and pay 60 Euros per night (based on 2 sharing)

Other niche style budget Berlin accommodation, to look out for in 2009 are guest rooms, bed and breakfasts and 'pensions', the latter of which is the name for B & B's on the Continent. In Berlin the amount of visitors staying in boarding houses rose 20% from 2007 (Visit Berlin statistics). I think especially more British holiday makers would revel in the opportunity in staying in a room in Berlin, especially in a Berliner Bed & Breakfast, or an Inn Berlin. This type of accommodation as well as the Berlin vacation flat, that I have outlined above, would appeal to the culturally curious traveler who wants to experience the real Berlin and get a feel for the neighborhood, as a local would. Furthermore, if you are staying in a guest room you would also have a chance to chat with the host and appreciate the insider tips that may otherwise have been missed from a book book or the standard hotel reception information. A typical room in Berlin through Be-My-Guest would set you back around 40 euros (based on 2 sharing)

– OTHER EUROPEAN TRAVELING TRENDS TO LOOK OUT FOR IN 2009 –

Other traveling trends can also provide the travel industry with indicators as to which areas to consolidate. The UNWTO report mentioned that the youth traveler was one of the fastest-growing segments with the largest potential being over 30, for whatever the share of youth travelers doubled in the five years from 2002 to 2007. The trend, which is expected to grow , was hinted at showing that youth travel is more about culture and lifestyle than about the age of a person. The trend may have had also had a knock-on effect on economy accommodation. According to the same UNWTO report, the traditional hostel, which is still by far the most popular accommodation choice for youth travel, saw a slight decline, but the budget hotel grew two-fold between the years of 2002 – 2007. Growth of Bed & Breakfasts and self-catering also rose during this period for youth travelers. The report also pointed to a trend in the use of internet for booking holidays. This could well be tied to the growth of youth travelers who are the most internet savvy of the age groups. Indeed the share of on-line bookings, for at least part of a trip, has risen from 19% of total trips abroad in 2003 to 41% in 2008. Another interesting statistic is that there was a 4% increase to 19% among those saying they pay attention to friends and relatives when gathering information about a trip, with travel trade as a resource beginning to slide.

The UNWTO report also highlights the fact that in 2008 sun & holiday travel was one of the largest growth areas with business travel also faring well, however there was stagnation in the amount of city breaks being underaken. This, as the ITB report summarized, may have been due to the amount of British people cutting back on the amount of second short breaks undertaken. The reduction may have been due to oil prices having gone up, the effects of which were either the reduction of low-cost air-lines or the increase of fares, which combined with the delays encountered because of new security checks, may have led to a stagnation of people under short breaks. Maybe as a result other forms of budget travel transport such as train & car travel increased significantly in 2008, which is what the report also indicated. The good news is however that oil prices have made a recovery from its high point last year.

In conclusion, according to the information I have gleaned, if businesses are firstly aware of the impact of the recession on the tourism industry, focus on their key areas of strengths and weaknesseses followed by selective investment and brand re-positioning, there is a good chance that, coupled with the help of governmental policies, they will be able to ride out the recession. It could be that changes made now may become the strengths of the future. But of course, it is important to be equally aware that there are no quick fixes in this game.



Source by Sarah Braimah

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