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Hospitality industry more resilient than expected, says BHA report

12 October 2009 by
Hospitality industry more resilient than expected, says BHA report

The hospitality industry has proved to be resilient through the recession, with far fewer casualties than anticipated, according to the 2009 British Hospitality Association (BHA) report into trends and developments, released today.

While hotel and restaurant insolvencies are running at a higher level than in previous years, quick action by operators to cut costs and to boost occupancy and footfall by providing special offers has enabled the vast majority to weather the storm, even if at reduced levels of profitability, the report says.

"Almost every establishment that has gone into insolvency has re-opened under new ownership," added BHA chief executive Bob Cotton.

The appetite for expansion in the hotel industry has also been undiminished by the recession, the report says, with more than 11,000 rooms opening in 2009 and a further 40,000 planned for the period 2010-2015.

The budget hotel sector, with nearly 6,000 rooms opening in 2009, is the biggest beneficiary of this boom. In 2001, there were 50,000 budget rooms, a figure which has risen to 105,000 in 2009.

"Budget hotels are clearly responding to consumer demand by introducing less expensive but high value rooms that are attractive to both the business and leisure market," said Cotton. "Their occupancies suggest that they fill a big gap in the market."

"The vast majority of the new-builds are company owned; many of them under franchise," said Cotton. "There are very few new, privately owned, independent hotels."

However, the 2009 report acknowledges that the recession has had an impact - even it was not as bad as feared.

More than 30 hotel projects have been put on hold or abandoned because developers have either gone into administration or have faced planning problems, while accessing funding has been another issue.

"Although the expansion is continuing, the recession is discouraging some investment - indeed, at least one major hotel company has announced it is cutting back this year," said Cotton.

The BHA's British Hospitality: Trends and Developments, 2009, report is sponsored by American Express.

Hospitality is in the middle of a building boom, says BHA >>

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Hospitality industry pays tribute to Bob Cotton >>

By Daniel Thomas

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