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For most of the first half of 2008, many of the big companies in the leisure industry took the blows of the markets with a collective expression that said: "What exactly have we done wrong?"
Share prices had been falling since the fourth quarter of 2007 on the back of a couple of profit warnings but the rate of decline took off early in 2008.
Yet save for the stocks in pubs, which had begun to report a drop-off in Christmas trade, leisure companies were suffering from investor perception of a consumer downturn rather than the reality of one.
Hotel groups were among those reporting little evidence in the first quarter of the year of customers staying away. After a few years of stellar growth, the rate of expansion was slowing, maybe, but sector operators such as InterContinental Hotels, which generates about half of its revenue and profits from franchises, remained largely untroubled.
Consumer belt-tightening appears to have strengthened in the second quarter, notably in June. "Putting out a current trading statement is incredibly difficult because it is hard to get a read on what is happening," says Adrian Fisk, an adviser at Lehman Brothers.
Spending cuts
"Around early June, you would be feeling reasonably optimistic. But there has been a big drop-off in the last two weeks of June and July is looking pretty tough."
The pub groups are feeling it most among leisure sector peers: the assault started that much earlier for them, with the introduction of the smoking ban in England last summer and increases in beer duty, not to mention their troubled business models, particularly tenanted pub groups.
They also have high levels of debt, having expanded their asset bases through high-value property transactions.
The groups that will work their way through the downturn best are the companies that dominate their areas of activity, and that is particularly true of the likes of Thomas Cook and TUI, the tour operators.
Cutting capacity
Business travel companies are now regularly reporting corporate spending cuts and that can only be good for Whitbread and Travelodge, the budget-priced hotel groups.
Their merged groups are far better placed to manage their earnings by cutting capacity, something they have done for this year's seasons and are likely to do again if, as expected, the travel market softens next year.
Across the sector, the spectre of refinancing does not emerge until 2010. By then, most people in leisure industries hope credit markets will have recovered.
It is hard to find a leisure stock that does not now look undervalued but the prospect of deals is being held back both by constrained debt markets and a general sense of unease about the sector.
"There is a fairly wide-spread view across private equity," says one banker, "that it is still premature to get back into consumer and leisure-facing stocks."
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