IHIF: Recovery "gradual" say top hoteliers

Top hoteliers are predicting a gradual recovery in the UK hotel sector this year.

Speaking at the International Hotel Investment Forum in Berlin, Andrew Coppel, group chief executive of Queens Moat Houses, said: "We certainly take a cautious view of 2002. Maybe we will see some light by the end of the year, but we're looking forward to 2003."

He predicted that the Queen's Golden Jubilee was likely to be a "one-week wonder" for hotels and largely restricted to London.

Coppel added: "I'm still very cautious about US travellers." Although there was evidence that they could be tempted to "cross the pond" by discounting, he concluded: "You would have to be a real hero to be anything other than cautious as far as 2002 is concerned."

Frank Croston, managing director of Holiday Inn UK, said: "I'm a supporter of this quarter-on-quarter gradual recovery theory.

"It seems to be logical and it seems to be bourne out by the first few months of trading this year, but there are lots of bumps in the road."

He added: "The strength of sterling continues to be a risk in the UK and I'm looking to see the tour group figures after Easter.

"We're a very expensive destination for Eurozone travellers."

Croston thought the gradual recovery in 2002 would bring business back to hotels in outer London and around Heathrow, which had lost out to more central hotels during the downturn in business.

But he remained concerned about Gatwick, where new hotels were being built just as many airlines were shifting flights back to Heathrow.

Michael Flaxman, managing director of Accor UK, said budget hotels had seen "very little impact" from 11 September and had finished the year with 3-4% growth in revenue per available room (revpar).

"We're very confident in that sector of the market," he said.

Melvin Gold, managing director of hotel consultancy services at PKF, said: "We see a return in the UK to 1999 revpar levels by 2003."

But Coppel warned there were still "enormous pressures on cost". He said the savings hotel companies had made by laying off staff after 11 September would be offset by increases in insurance costs and other business overheads.