The quick summary - they expect hospitality and package prices to stay strong and grow slightly in 2008 and first half 2009 but then weakness will start to appear. The only market they identified as having RevPAR issues at the moment was Italy.
Here are the main points came from the call:
- RevPAR to keep increasing but in a downward trend: Citi still expect RevPAR to rise by about 4% in 2008 and then again by 3% in 2009. This compares to increases of 8% in 07 and 6% in 06. One of the main factors sustaining RevPAR (according to Citi) has been the tightening of capacity by the big two (TUI and Thomas Cook) resulting in maintainance/slight increase in hotel prices;
- Occupancy will remain strong through 08 and early 09 but then could weaken: Traditionally the European market is 18-24 months behind the US. Therefore should expect occupancy rates to start to drop in mid 2009 which will track with the reduction in the growth of RevPAR. Particularly concerned about the Italian market which is showing weakness already; and
- TUI and Thomas Cook are becoming more and more aggressive in their online push: claim TUI are targeting 65% of sales online (though did not give a date).