Hotels using terror attacks as "fig leaf"
The repercussions of 11 September and the economic downturn have provided the perfect excuse for hotel companies to get rid of problem staff, says a leading industry observer.
Chris Rouse, director of property advisor Insignia Hotel Partners, said that after City analysts had downgraded expectations across the sector, now was a good time to re-evaluate assets, downgrade profit forecasts, strengthen balance sheets, and lay off underachieving employees.
He said: "The industry has an enormous fig leaf. If I were a chief executive, I'd take the attitude that there's little I can do about present trading conditions so I'll pile on all the agony now, and make myself look like a genius next year."
Rouse predicted that European resorts would do well and said the effect of 11 September in the UK outside London was "negligible."
British Airport Authority statistics show that while North Atlantic air traffic dropped by 38% after 11 September, there was strong growth to European destinations from Stansted (+11.4%), Glasgow (+6.9%) and Edinburgh (+13.4%), buoyed by low-cost airlines.
Low debt levels and interest rates, and the experience of recession in the early 1990s, meant that hotel groups were in a strong position to ride out the downturn. "I can't see anyone failing," Rouse said.
