10 March 2009

Airlines have the edge over hotels in a recession

airliners taxiing in sunset
I'm struck by the contrasting way in which the hotel and aviation industries are coping with global recession.

Hotel executives are looking particularly gloomy right now.

Yesterday, the DLA Piper 2009 Europe Hospitality Outlook Report was published. Its survey of 143 UK hotel executives revealed that an astonishing 95% of them expected hotel chains to start going bankrupt in the next 12 months. A quarter of them expect the number of hotel chain failures to be over ten.

38% expect the industry to recover in 2010, but the majority (53%) don't anticipate recovery for the hotel industry till 2011.

By contrast, the aviation industry is also gloomy...but not downhearted.

Last week, Roberto Kobeh Gonzalez, president of the Council of the International Civil Aviation Organization (ICAO) predicted that air transport would bounce back in one or two years.

"I am very, very optimistic (about the recovery)," he told the Chinese news agency Xinhua.

The ICAO's traffic forecast for 2009 indicates zero growth, but the organisation anticipates +4.4% growth in 2010. Many airlines, Gonzalez said, are already responding to the recession by cutting costs through fleet reduction, routes cancellation and merger negotiations.

One of the key reasons for that tone of resilient optimism lies in that last point. 

When times get tough, airlines can downsize quickly and efficiently in a way that property owners simply can't - they can park their aircraft.

And they are (parking them).

Travel Weekly reports that Ascend, a London-based aviation consultant and data provider, has counted almost 2,300 jet airliners parked up right now - 11% of the world's fleet. Almost half of them (1,167) were grounded last year, which indicates how quickly the aviation industry was able to respond to the downturn in business. 

Hotels or airlines? I know which travel sector I'd prefer to be in right now!

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