Hotel sector faces recovery rather than growth

The UK hotel market is facing a recovery rather than a growth period in 2010, research has warned.

The report from market analyst Key Note highlights the drop in revenue per available room (revpar) caused by hoteliers cutting average room rates in 2009 as a reason for the fall in the industry’s overall profitability, and cites it as a major set-back to its recovery.

According to the Hotels Market Report Plus, the cuts in room rates in the face of falling occupancy “may have already set the hotel sector back - as competition based on prices rather than the full service offer may encourage a longer-term focus on costs among clientele – which could stifle a recovery in prices as the recession lifts”.

But the report also points out that some commentators are more optimistic, including Marvin Rust, hospitality managing partner at Deloitte, who told Caterer in June that both weekend leisure demand in London and the regions, as well as corporate weekday demand in London over the past five months had increased, signalling that the worst may be over for hoteliers.

Summing up, the Key Note report predicted “further consolidation as smaller chains and independents confront tough conditions.  A third successive poor British summer in 2009 will have done them few favours in terms of encouraging domestic breaks.” 

However, the outlook wasn’t totally bleak, as the report added: “with the rise in available properties, there will be increased opportunities for the major brands to develop their UK portfolio.”

London leads recovery among European hotels >>

Hotels to benefit from decade of sports events >>

Global hotel transactions down by two thirds in value >>

Travelodge launches £100m fund to develop new hotels >>


By Rosie Birkett

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