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Economic crisis hits bottom?
There is mounting evidence that the economic crisis has bottomed out. For example:
• Europe’s two biggest economies, Germany and France, announced that they had exited recession in the second quarter.
• The fall in the number of passengers flying business and first class is showing signs of stabilizing, IATA said. “Figures from the International Air Transport Association (IATA) provided a further indication the economic crisis was bottoming out but offered little respite for airlines battered as traditional business class passengers cut costs,” the agency said.
• “Hotels that operate in the luxury, upscale, and midscale without food and beverage segments are expected to see customers beginning to re-appear in the fourth quarter of 2009,” said PKF Hospitality Research.
• “The recession may have bottomed out,” writes The Wall Street Journal which adds that airlines remain worried things will never return to the way they were.
• “With the budgeting process underway at hotels around the US, the recovery of lodging demand is an important milestone that will be reached in the year ahead,” said R. Mark Woodworth, president of PKF Hospitality Research. He added, however:
“The catch; however, is that the practice of price discounting has firmly taken hold, and, as a result, room rates are expected to decline once again in 2010.”
As for air travel, an IATA survey last month showed that many airlines do not expect a proper recovery until early 2011.
"The issue now is that this stabilization of passenger numbers is partly being achieved at the expense of much lower yields, as airlines seek to boost cash flow by making more cheaper seats available," it said.
On a less positive note, the Journal said that even if the recession is over or almost over, airline officials are still afraid of the future.
“The industry has yet to recover from an across-the-board revenue drop that followed the 2001 terrorist attacks. If thrifty consumers and cost-cutting businesses are this recession’s legacies, airlines will be forced to shrink even more,” it wrote.
by David Wilkening
David
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