Olivier Petit, Partner Deloitte Tourism, Hotels & Leisure

How is the market for urban residences performing?

Olivier Petit - Supply has been growing by 15 % a year for several years. But 2009 was clearly a turning point, with a number of management failures. We're seeing a scissor effect, with occupancy rates falling and prices falling as a result of the crisis, while supply continues to grow.

How do you explain this crisis?

O. P. - The economic situation is only an aggravating factor in a crisis that has more to do with the development model, which too often focuses solely on property and neglects commercial operations. The list of operators in difficulty is likely to grow even longer in 2010.

What will become of these homes in difficulty?

O. P. - The residences that are experiencing problems are often located on the outskirts of town and do not meet the needs of customers. Another weakness is the low profile of some managers. Those that are going to disappear will be replaced by existing players who will seize opportunities for external growth, but also by new entrants with real expertise.

How do you see 2010?

O. P. - We should see a return of business customers in the second half of the year. But many residences have opened in recent months and there is a real risk of oversupply in certain towns. This in turn weakens the local hotel industry. However, there is still room for new operators, provided they are solid and choose the right locations. Particularly in inner Paris, where a strong international clientele and a mix of leisure and business customers limit the risks.