American Company Forecasts Growth in Global Hospitality Industry for 2006

The outlook for the global hospitality industry remains positive for 2006, according to Ernst & Young LLP´s latest global activity report on hospitality industry trends.

The report forecasts strong operating performance growth worldwide, with China and India leading the pack. “We are seeing major international hotel companies push ahead in emerging markets, such as China, India, and Eastern Europe, with new development programs aimed at establishing strong footholds in those fast growing geographies,” said Michael Fishbin, leader of Ernst & Young´s hospitality advisory practice in the United States.

“In response to the global chase for better investment fundamentals, the global hospitality industry should expect increased capital flow from U.S.-based investors to several international markets, mostly Latin America, Caribbean, Asia and Europe,” said Fishbin. “And the U.S. can also expect increased investment in its own hospitality industry from investors in the Middle East.”

In Latin America, the hospitality market is still recovering as the economies in the region continue to stabilize. International investors are migrating to the region to develop upscale and luxury developments.

Strong growth and continued investment is expected to continue in the Caribbean in 2006. However, the threat of another active hurricane season, and a resultant retreat in U.S. demand, looms over the islands.

The Asian region will be carried by strong growth in China, where tourist demand is expected to double the global growth rate. Major hotel companies are trying to expand into the Chinese markets in nearly every industry segment. Also, Japan has seen a leap in the development of luxury hotels.