Effects of tourism on airports

Effects of airports on tourism

Richard Németh MRICS

Partner, Managing Director - BDO Hungary Hotel and Real Estate Services Ltd.

23 June, 2016

BUDAPEST AIRPORT – STATUS QUO, DEVELOPMENT PROJECTS

CORRELATION BETWEEN NUMBER OF AIR PASSENGERS AND NUMBER OF

GUEST NIGHTS IN THE CITY

INTERNATIONAL OUTLOOK – VIENNA, PRAGUE, WARSAW

AIRPORT HOTELS

ECONOMIC IMPACT OF EUROPEAN AIRPORTS

FUTURE OUTLOOK

URBAN DEVELOPMENT STRATEGIES AND AIRPORTS

LF AIRPORT REGIONAL DEVELOPMENT CLUSTER & FUTURE STEPS

MAIN TOPICS

BUDAPEST – LISZT FERENC INTERNATIONAL AIRPORT

• Number of passengers exceeded 10.3 million in 2015

• 95 destinations, served by 44 airlines

• Cargo volume: 91,422 tonnes as of 2015

• Accessibility: by car via „High-Speed Road” (two-lane road), by bus

Services:

• SkyCourt Conference Center (up 100 guests)

• 29 shops, 20 restaurants

Airport hotels:

• 3 hotels, no direct physical connection, no international brands

Office centres:

• BUD Office Center and Quadrum

• Rentable office space on 13,700 sqm

Source: Budapest Airport

LISZT FERENC INTERNATIONAL AIRPORT

DEVELOPMENTS

• M0 motorway – 78 km was completed in 2013, the

whole planned length is 108 km

• New parking spaces – more than 1,000 new parking

lots from summer 2016

• PIER B – an additional 10,000 sqm passenger area,

27 new boarding gates, 10 new bridges

Project is planned to be finished by June 2019

Estimated total investment cost: EUR16.9 million

LISZT FERENC INTERNATIONAL AIRPORT

-4,1%

1,2%

8,9%

-4,7%

0,2%

7,5%

12,5%

5,8% 6,4%

4,3% 4,1% 4,0%

-9,30%

9,49% 10,28%

12,70%

5,14%

2,87%

5,89%

3,30% 3,30% 3,30% 3,30% 3,30%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

5 000 000

6 000 000

7 000 000

8 000 000

9 000 000

10 000 000

11 000 000

12 000 000

13 000 000

14 000 000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Evolution of Passenger Volume at Liszt Ferenc International Airport Budapest and evolution of Guest Nights volume spent in hotels in Budapest

(2008-2020)

Number of Passengers Served Number of Guest Nights

Change in Percentage (Passengers) Change in Percentage (Guest Nights)

Sources: Budapest Airport, National Central Statistical Office, UNWTO - Tourism Towards 2030

MALÉV

Bankruptcy

INTERNATIONAL OUTLOOK

Vienna International Airport • 22.8 million passengers in 2015 (27.6%-transfer, 71,9%-local)

• 181 destinations, served by 75 airlines

• Cargo volume: 272,575 tonnes as of 2015

• Accessibility: by car (six-lane road), by bus, by train and on

bike path

Services:

• 86 shops, 38 restaurants

• VIP & business centre (up to 60 pax)

Airport hotels:

• 6 properties**, out of which 3 are internationally branded

hotels (NH, Ibis, Azimut)

Office centre:

• Rentable office space: 90,734 sqm

*Source: www.viennaairport.com

**Source BDO Research

INTERNATIONAL OUTLOOK

Václav Havel Airport Prague • Number of passengers exceeded 12 million in 2015

• 141 destinations, served by 64 airlines

• Cargo volume: 50,594 tonnes

• Accessibility: by car (four-lane road) and by bus

Services:

• 85 shops, 29 restaurants

• Congress Hall (up to 350 pax)

• „Relaxation and Entertainment” Centre

Airport hotels:

• 4 properties**, out of which 3 are internationally branded

hotels (Courtyard by Marriott, Holiday Inn, Ramada)

Office centre:

• Airport Business Centre on 14,880 sqm

*Source: www.prg.aero

**Source BDO Research

INTERNATIONAL OUTLOOK

Warsaw Chopin Airport • Number of passengers reached 11.2 million in 2015

• 85 destinations, served by 46 airlines

• Cargo volume: 58,284 tonnes as of 2015

• Accessibility: on 2 expressways (six-lane roads), by train, by

bus

Services:

• shops, restaurants, coffee shops etc.

Airport hotels:

• 10 properties**, out of which 7 are internationally branded

hotels (Hampton by Hilton,Courtyard by Marriott, Novotel,

Mercure, Holiday Inn Express, Gromada Hotels, B&B Hotels)

Office centre:

• Wisniowy Business Park

• Rentable office space on 50,730 sqm

*Source: www.warsaw-airport.com

**Source BDO Research

AIRPORT HOTELS

Key attributes of airport hotels:

• Located next to/in close proximity to

airport/within the physical boundary of the

airport

• Large meeting capacities

• Range of F&B outlets

• (spa/wellness centre)

Key benefits of airport hotels:

• Convenience

• Time savings

• Better productivity

• Meeting places

• Excellent access to transport

• Relax between flights

From lower-end hotels

To high-end hotels

RECENTLY OPENED AIRPORT HOTELS AND PIPELINE PROJECTS IN EUROPE

Hyatt Place London

Opened: May 2016 170 guestrooms

Meeting space on 168 sqm

Open food market

Fitness centre

Moxy Munich Airport

Opened: March 2016 252 guestrooms

7 event rooms

24/7 F&B offerings

Fitness centre

Moxy Hotel Stuttgart

Airport

Planned opening: 2017 176 guestrooms

Holiday Inn Frankfurt

Airport:

Planned opening:

Ferbruary 2017 288 guestrooms

6 meeting rooms

IHG-dual branded hotel

Planned opening 2018

Heathrow Holiday Inn + Staybridge Suites

433 + 190 guestrooms

Ibis Styles Airport Hotel

Budapest

Planned opening: July

2017 153 guestrooms

1 restaurant+1 lobby bar

Meeting space on 350 sqm

NUMBER OF AIR PASSENGERS AND AIRPORT HOTEL SUPPLY

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

0

5 000 000

10 000 000

15 000 000

20 000 000

25 000 000

Budapest Vienna Prague Warsaw

Num

ber

of

available

room

s

Num

ber

of

pass

engers

serv

ed

Number of passengers served at international airports and number of available rooms in airport hotels (2015)

Number of passengers served Number of available rooms

Source: BDO Research, Budapest Airport, www.viennaairport.com , www.warsaw-airport.com, www.prg.aero

AIRPORT HOTELS VS. DOWNTOWN PROPERTIES

AIRPORT HOTELS CITY HOTELS

EUR199-226.87 EUR119-132

EUR91-122.8 EUR78-114.3

EUR194-211 EUR77-145

EUR87-97 EUR113-119

*BDO Research via booking.com on the 17th June 2016

DIFFERENCES BETWEEN PUBLISHED RATES* OF INTERNATIONALLY BRANDED HOTELS AT AIRPORT AND IN THE CITY

NH

IBIS

WarsawHAMPTON BY HILTON

Vienna

PragueCOURTYARD BY MARRIOTT

ECONOMIC IMPACT OF EUROPEAN AIRPORTS

Source: InterVISTAS, 2013

Hungary

Direct jobs: 8,200

Income: EUR0.20 billions

1.6%* of national GDP

Austria

Direct jobs: 24,200

Income: EUR1.21 billions

3.5%* of national GDP

Czech Republic

Direct jobs: 16,800

Income: EUR0.46 billions

5.12%* of national GDP

Poland

Direct jobs: 23,100

Income: EUR0.53 billions

14.78%* of national GDP

European airports contribute to the employment of 12.3

million people earning EUR356 billion in income annually,

and generate EUR675 billion in GDP each year in total,

equal to 4.1% of GDP of Europe

Direct Jobs by Employment Type

28% - Airlines

14 - 14% - Ground Handling and Airport/ATC

8% - F&B

6% - 6% - 6% - Airport Security & Passenger Screening and MRO and

Retail & Other In-Terminal Services

5 - 5% - Ground Transport and Customs, Immigration

8% - Other

*Total Economic Impacts (Direct+Indirect+Induced+Catalytic)

FORECAST CHANGES IN AIR PASSENGER VOLUMES

GLOBAL

7 billion passengers by 2034, with a 4.0%* average annual

growth rate

EUROPE

Slowest growth rate: 2.7%*, 1.4 billion passengers by 2034

CENTRAL EASTERN EUROPE

Higher growth rate than the European average

LISZT FERENC INTERNATIONAL AIRPORT

Outstanding annual growth rate (4% - 6.4%) until 2020,

13.1 million passengers by 2020

4.0%

2.7%

>2.7%

4-6.4%

Source: IATA Outlook, Budapest Airport

URBAN DEVELOPMENT STRATEGIES AND AIRPORTS Vienna

• Airport is integrated in the surrounding areas provide economic

boost

• Development plans can be integrated into the local, regional or national

strategic plans

• Best practise for „Airport City” in Europe: Amsterdam, Munich, Vienna

VIENNA

• Tourism Strategy 2020 Vienna – Now or Never - joint efforts of Vienna

Tourist Board, Vienna International Airport and airline partners

• Central European airport hub function – one of Europe’s best networked

metropolises

o Bring more visitors

o Step up the attractiveness of Vienna for international

enterprises

o Strengthen its role as a connector between East and West

• Air traffic is the backbone of international tourism in the city

• Construction of a third runway + expansion of the direct flight network

• Reconstruction of railway line to Vienna International Airport

• Marketing cooperation

BUDAPEST LISZT FERENC INTERNATIONAL

AIRPORT REGIONAL DEVELOPMENT CLUSTER

• Budapest Municipality

• Municipality Pestszentlőrinc-Pestszentimre

• Municipality of Vecsés

• Pest County Municipality

• Budapest Airport

• Hungarocontrol

To revive the local economy

To improve the regional

infrastructural and human

resource capacities

To improve local

employment conditions

To attract national and

international investors to

the region

FUTURE STEPS

• HARMONISATION OF AIRPORT AREA & AIRPORT CLUSTER DEVELOPMENT PROGRAMME

WITH 10-YEAR STATE TOURISM STRATEGY – COOPERATION WITH THE HUNGARIAN

TOURISM AGENCY (MAGYAR TURISZTIKAI ÜGYNÖKSÉG) AND BUD AIRPORT

• DEFINITION OF STRATEGIC GOALS, REQUIREMENTS AND STRATEGIC PARTNERS

• QUALITY – INTERNATIONAL COMPETITIVENESS

• KEEP GUESTS WITHIN THE BOUNDARIES, COMPLEXITY OF SERVICES AND

CONCENTRATION OF DEMAND

• INFRASTRUCTURE (AIRPORT ACCESS, PARKING, ETC.)

• MARKETING AND BRANDING (USPs, KEY MESSAGES, KEY BRAND PILLARS)

• HUMAN RESOURCES STRATEGY (EDUCATION, TRAINING, RESIDENTIAL, INNOVATION,

ETC)

• DATA COLLECTION – MARKET RESEARCH

• COMMUNICATION AT LOCAL, BUDAPEST, NATIONAL AND INTERNATIONAL LEVELS

THANK YOU FOR YOUR ATTENTION!

More information:

Richard Nemeth

richard.nemeth@bdo.hu

+36-30-967-8415

www.bdo.hu