Predictions for 2008 from the industry

31 December 2007
Predictions for 2008 from the industry

This year looks set to be a tougher one for hospitality and tourism operators. We round up the predictions of the main trade bodies here." target="_blank" rel="noreferrer">British Hospitality Association]( London hotels are on a roll at the moment and enjoying high occupancies mainly from overseas travellers; this looks likely to continue into 2008 though the world economic situation may depress demand somewhat next year.

UK provincial city centre hotels, with much new investment, are enjoying only reasonable occupancies and are much more dependent on domestic demand, which may be significantly affected by the problems with the UK economy, the so called credit crunch, and lower business activity.

These factors also affect rural hotels, which are faring the least well, dependent as they are on leisure travel, consumer spending (which is under increasing threat) and the boom in cheap overseas travel.

We forecast that the volume of inbound tourism in 2008 will be below that achieved back in 2006, though with some annual growth in visits during the second half of the year. The value of inbound tourism is forecast to remain static in real terms during 2008.

This year presents a host of opportunities to grow the inbound visitor market across Britain, ranging from Liverpool being European Capital of Culture, the opening of Terminal 5 at Heathrow airport and the opportunity to showcase London and Britain as host city and nation of the next Olympic and Paralympic Games at the closing ceremony of the 2008 Games in Beijing.

Markets closer to home are set to benefit from improved access to Britain thanks to Eurostar's recent move to St Pancras International.

Along with the opportunities come a number of threats to inbound tourism, perhaps the most uncertain of these being the extent to which the ‘credit crunch' will lead to a wider economic slowdown, especially in the USA.

[Tourism Alliance](
It looks increasingly likely that inbound tourism hit the high water mark in June 2007. Every month since then inbound visitor numbers and spend have been down on 2006 meaning that by year-end total inbound tourism for 2007 will, at best, be static on the preceding year.

On the domestic front, the credit crunch shows few signs of easing and with that consumer confidence is starting to fall. Most noticeably, house prices look to be easing, affecting people's perceptions of wealth and the forecasts from the Bank of England are cautionary in the extreme. Any lowering of people's perceptions of wealth and security will certainly affect spending on discretionary items such as holidays. Add to this the follow-over effect from poor summer weather and floods in 2007 impacting upon 2008 booking levels and the domestic market will also be under considerable pressure during 2008.

[Visit London](
Our estimates suggest that the capital's visitor economy continued to grow during the first half of 2007 and should result in another record year for overseas visitors to London - a predicted 16 million visitors. However, falling visitor numbers in the second half of this year and forecasts for 2008 indicate London can expect lower growth from overseas visitors in 2008 of +2.5%.

Confidence among the majority of Scottish tourism businesses is high. Independent research carried out for VisitScotland in September and October 2007 showed that 50% of businesses surveyed believe that they will see an increase in business in 2008.

[Visit Wales
Despite appalling weather in the high summer period, feedback from Welsh tourism operators indicates that performance has picked up in the autumn to be on a par with that for the same period last year and that confidence is generally fairly buoyant.

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