Europe’s Top Hotel Says Glut To Thwart Revival: Corporate India
Christine Lagarde warns against ‘complacent’ Europe
The stock was up 4.4 percent at 3,174 pence as of 11:22 a.m., while Diageo advanced 0.8 percent to 1,954 pence. Remy dropped 3.1 percent to 71.27 euros in Paris. Under Pressure Conditions in both Europe and North America saw a modest improvement in the second quarter, SABMiller Chief Executive Officer Alan Clark said in the statement. Organic volume in Europe slid 4 percent in the first half compared with the median estimate for a 5 percent decline. The performance represented an improvement on the first-quarters 7 percent decline. Sales to wholesalers at the brewers MillerCoors LLC unit in the U.S. slid 1.5 percent in the second quarter, better than the first quarters 5.3 percent drop. Declines in Coors Light and Miller Lite were partially offset by brands including Redds and Leinenkugel shandy, the company said. The brewer said it expects the consumer climates in both Europe and North America to remain under pressure. SABMiller said it achieved a strong performance in Africa, where volume rose 9 percent in the first half, and good progress in Latin America , South Africa and the Asia-Pacific region. The brewer gets the largest proportion of sales from emerging markets compared with its main rivals, helping compensate for declining beer sales in Europe and the U.S. Diageo Misses Volume rose 1 percent in Latin America, SABMillers largest region, in line with estimates. Civil unrest weighed on improvements in Colombia , though sales in Peru returned to growth in the second quarter after tax increases.
Youth unemployment in Spain and Greece is above 50%; while rates in Portugal, Italy and Ireland are all above 30% (CNN) — The head of the International Monetary Fund is warning European governments against complacency despite the region returning to growth earlier this year for the first time since 2011. Speaking at the Fund’s headquarters in Washington DC, managing director Christine Lagarde told CNN’s Richard Quest that member states cannot afford “fatigue” on their commitments to create jobs and to shore up the region’s banks. Europe out of limelight Europe has been spared some market scrutiny recently, as headlines shifted to the U.S. debt ceiling negotiations and the Federal Reserve’s bond-buying program. Europe’s energy challenges Solving Portugal’s economic woes Lagarde said that leaders in the currency union will be eager to remain out of the limelight. Is Serbia ready for EU membership? And last year European finance ministers approved a 39.5 billion euro ($51.6 billion) lifeline for Spain’s banks, struggling after the property bubble went bust. In return for state aid, creditors have imposed strict rules on debtor nations, forcing them to carry out harsh austerity measures. However, that strategy has come under question. Mujtaba Rahman, Europe director at Eurasia Group, said Germany may believe austerity is working but “clearly there’s a strand that believes otherwise.” Some eurozone economies, he noted, believe they have improved after easing off on austerity. Tackling youth unemployment Lagarde, a former French finance minister, also highlighted youth unemployment as the biggest priority on the policy-making agenda. She said: “Countries have to do their job; the IMF will help the process as well so we have to partner goodwill, the money available and political determination to focus on the right issues.” Youth unemployment in Spain and Greece is above 50%, where strict austerity programs are in place, while rates in Portugal, Italy and Ireland are all above 30%. Widespread unemployment has led to anti-austerity protests in the worst-hit nations with many demonstrations turning violent. But Rahman believes that youth unemployment is a problem that must be tackled by domestic governments rather than at the European level. He added: “It’s clear that politicians are not willing to mobilize a large amount of resources within the EU budget to tackle the problem of youth unemployment, not in a meaningful way.” He added: “At the margin there may be a commitment do something but this isn’t meaningful.” CNN’s Oliver Joy contributed to this report
(EIH) , the owner of the Oberoi brand of hotels, have halved in the past three years, according to data compiled by Bloomberg. Indian Hotels jumped 3.3 percent yesterday in Mumbai to 50.30 rupees, while EIH rose 0.2 percent to 54.60 rupees. No Scope Indian Hotels reported its first annual loss since at least 1997 in the year ended March 31 as sales growth slowed to the least in three years, according to data compiled by Bloomberg. EIH had its smallest profit since 2005. I dont see any scope for room-rate increases over the next couple of years, said Sumant Kumar, an analyst with Elara Securities (India) Pvt. in Mumbai . Theres an oversupply in this space and demand is not picking up as corporate side expenditure is muted given the economic scenario. Indias $1.8 trillion economy expanded 5 percent last fiscal year, the slowest pace since 2003, as companies and businesses curtailed travel budgets. Occupancy rate at luxury hotels fell to 59.9 percent in the year through March 2012 from 73.8 percent in 2006, according to data provided by the Federation of Hotel and Restaurant Associations of India . Slowing economic growth hasnt discouraged the operators from betting on Indias potential. Accor, which has started a three-year reorganization plan that includes increasing its focus on emerging markets, is betting on Indias middle class, which is forecast to add the equivalent of more than the entire population of Germany in less than a decade. Middle Class Between 2010 and 2021, Indias emerging middle class — who earn as much as $5,550 a year — will swell by 100 million to 570 million, PricewaterhouseCoopers estimated in June 2012. Paris-based Accor , which has 23 percent of its hotels in Asia, considers India as one of its three strongest growing markets over the longer term after China and Indonesia , Issenberg said. More than half the hotels it will build will be in Asia, he said. Hotels are a consumer item, its a discretionary spend, Issenberg said. As the middle class continues to grow in Asia, travel will continue to grow and grow faster than GDP. Nakul Anand, chief executive of ITCs hospitality business, said in July that the operator is developing at least 18 projects.