BERLIN — The 2023 summer travel season was very strong, and Europe is expected to have another strong season this year, with both economists and hotel industry experts citing reasons for optimism across the continent. are sharing.
HSBC Global Economist James Pomeroy said at the 2024 International Hospitality Investment Forum that market players will be disappointed that interest rates won’t be cut as much as they had hoped at the start of the year. But the best possible news is that the global economy is likely to be out of the weeds when it comes to further rate hikes.
Pomeroy said the floodgates could soon open on global financial markets.
“There are so many central banks around the world, especially in Asia, that are basically just waiting.” [Federal Reserve] “We need to cut rates, and as soon as the Fed cuts rates, more and more central banks will cut rates,” he said.
Pomeroy said this is a moment of optimism, even for a notoriously pessimistic economist.
“It would be difficult for even the gloomiest economists to be too bearish at this point, because just about every chart we’re looking at is moving in the right direction,” he said.
STR Managing Director Robin Rothman echoed that overall optimism, particularly for the second and third quarters of 2024.
Based on second-quarter on-book business, hotel midweek demand is 3 percentage points higher than the same period in 2023, Rothman said.
“This will significantly improve mid-week room rates in the hotel sector,” he said.
Rothman said part of the strength in 2024 is an improvement in business travel, which complements the strong leisure travel seen last summer. Some industry players are concerned that fewer international leisure travelers will visit Europe this year, but demand is expected to remain strong, Rothman added.
“All we can say is that [the third quarter] “It’s going to be a stronger summer than last year,” he said. “I didn’t think we’d have a summer as strong as last year, but it turns out it’s going to happen.”
Rothman said his initial concerns heading into the coming summer were how many American travelers would continue to visit the continent and “is everyone who wants to come already here?” That’s what it means. But now, travel from the U.S. to Europe is expected to increase by 10% year over year. Part of that demand is due to Taylor Swift’s Elas tour in the European market, he added.
Pomeroy expects European and global consumer spending to remain strong this year, despite earlier concerns that a recession could hit various global markets in 2024. He said there was. And demand is expected to remain strong across the travel industry.
“The service industry was doing well.” [in 2023]and will probably do well this year as well,” he said.
Another positive economic news is that manufacturing is rebounding as various durable goods companies have largely overcome their inventory problems and companies have returned to ordering items such as electronics and furniture.
“Trade will pick up,” Pomeroy said. “Manufacturing activity will pick up, employment will increase, confidence will recover, and all of that will trickle down to the services side of the economy.”
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