hospitality barometer

BOUTIQUE HOTEL BAROMETER Q2 2020

In summary

  • After a promising start of the year, hoteliers’ sentiment has reversed with 80% expecting a worse second half of the year
  • 75% of hoteliers are reporting weaker business metrics compared to the same period last year
  • Beyond direct COVID-19 impacts, hoteliers are mainly concerned with the weakening of the global economy and its impact on travel flows.
  • Despite the crisis, 2/3 Hotels reaffirm their commitment to sustainability.
  • Many hoteliers have already taken the opportunity to invest in property renovations and marketing. Overall, the investment landscape is collapsing, with more than half of the hotels not planning any additional investments in 2020.

Measuring the sentiment of the Mediterranean small boutique hotels

The survey was answered by more than 100 small boutique hotels across 12 Mediterranean countries, including: Greece, Italy, TunisiaFrance, Morocco, Cyprus, Malta and Croatia. We asked the hoteliers to tell us about their business performance and concerns, technology, sustainability and their overall outlook for the remaining of the year. For the first-time hoteliers were asked to provide feedback related to COVID-19 specific measures and activities.

2020 started as a promising year for 54% of the hoteliers

The barometer painted a bleak picture with 74% of the responders reporting much worse levels of room nights booked in the past three months compared to the same period last year – a big change versus the beginning of the year when over half of the hoteliers (52%) reported better or much better levels of business. Drilling down to the individual countries, the report indicates that bookings were more affected in certain countries, with hoteliers from Croatia (100%), Malta (88%), and Italy (88%) reporting much worse levels of business. Surprisingly, there are a number of green shoots in North Africa, as 17% of Moroccan Hoteliers reported business levels similar to last year and an encouraging 33% of Tunisians foreseeing better levels of business. 

In countries less impacted by COVID, hoteliers we talked to “responded rapidly to this thread, by revising their strategies and focusing more on the local guests, thus reducing their dependencies on external markets” said Rim Jourdan, the CEO of The Boutique Vibe. 

... but the pandemic drew a pessimistic picture over the sector

When it comes to the hoteliers’ outlook for the remaining of 2020, the report indicates a complete reverse of sentiment compared to our Q1 results. As of today, 77% of the hoteliers are expecting a negative (30%) or very negative (47%) second half of 2020. January and February were very promising for markets like Tunisia and Greece after years of crisis and slow recovery. But the epidemic drastically changed the landscape. A partner-hotelier in Greece declared he is “going through the most stressful months of his professional life, since the 6th of March”. 

Certain countries seem to be more optimistic than others, mirroring the booking forecast. 66% of the Tunisian hoteliers maintaining a positive outlook for the year, while a number of hoteliers maintain a neutral outlook – Morocco (50%), Albania (33%), Malta (25%), France (17%), Croatia (33%) and Spain (33%). Boutique Hotels with size over 20 rooms seem to be slightly more optimistic than the smallest properties, with 26% of them maintaining a neutral/positive outlook for 2020.

Hoteliers are concerned with reduced travel flows

The Barometer prompted hoteliers to report their top business concern for 2020, excluding the impact of COVID-19 which was naturally expected to dominate the list. Almost half (45%) of the responders are concerned about the soft global economy and the potential impact it will have on travel flows, up from merely 26% who reported this as a main concern in the beginning of the year. Operations is the second largest category (21%), as it requires even more focus than usual. 14% of the hoteliers are concerned with the increasing level of costs and their limited negotiating power; a category that doubled compared to the responses in Q1 (7%).

The new safety and hygiene protocols make running daily operations more complex and costly than usual. However, the vast majority of hoteliers I have been speaking to are fully committed towards implementing them, as they feel deeply responsible to their staff and their guests” said Rim Jourdan, the CEO of The Boutique Vibe.

Remarkably, hoteliers feel less threatened in regard to new trends in accommodation (like Airbnb) compared to earlier this year (a drop from 19% in January to merely 8% in June). Bigger hotels (20 rooms+) are more concerned about operations (29%) than smaller boutique hotels (17%), whereas the softening of the global economy seems to be more concerning for hoteliers operating smaller boutique hotels (48%).

Hoteliers confirm their commitment for a more sustainable sector

When it comes to sustainability, an area that The Boutique Vibe is committed to support and highlight, 66% of the responders affirm that the crisis didn’t shift their commitment for a more sustainable hospitality. The report shows disparities between geographies in this field: majority of hoteliers in Spain (100%), Croatia (83%), Italy (75%) and Cyprus (71%) indicate that sustainability has always been an area of focus. While there are opportunities for improvement in other markets where 25% to 33% of hotels are considering getting on the sustainability path, like Albania (33%), Tunisia (33%), France (33%) and Malta (25%). Similar to that, 1 in 5 small boutique hotels (up to 20 rooms) don’t seem to have a sustainability focus yet but are considering it for the future.

Overall, the investment intentions are collapsing

The barometer prompted hoteliers to report on their planned levels for investment for 2020, with the majority of them (54%) replying that they don’t have any additional investment planned for the remaining of the year (up +24% compared to Q1) and an additional 42% planning minor investments (up to $50,000). Drilling down to a country level, those small investment opportunities will be materialized mainly in Greece (58% of the hotels), Cyprus (57%), France (50%) and Morocco (50%). Very small hotels (up to 20 rooms) seem to be more inclined in investing back to their property with 49% of them reporting they will do so, compared to 40% for larger boutique hotels.

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Hoteliers are confident towards technology

Finally, when it comes to hospitality technology, 63% of the hoteliers reported to be fully up to speed in terms of knowledge and options (on par with our Q1 results). However, fewer hoteliers declare being confused in regard to choosing the most appropriate technology solutions (14%) which could indicate that this extra time during lockdown was used wisely by many to gather knowledge and get trained