Hotel industry has to brace itself for a rough year

15 January 2009 by
Hotel industry has to brace itself for a rough year

The hotel industry will ‘bump along the bottom' until cash becomes more easily available from banks, Charles Romney, partner at CMS Cameron McKenna predicts.

Speaking on a panel at Cushman & Wakefield's new year summit this week, the industry was told to brace itself for a rough year ahead until bank liquidity returned.

Jamie Chappell, managing director at STR Global, agreed the outlook for 2009 was "not particularly good" but said the downturn had at least come at the right time, at the bottom of the cycle, when trends had been slowing anyway and had followed at least three years of consolidated growth.

He added: "Heavily branded hotels are holding their rates much better than non-branded, which is why Italy, with only 6% branded properties, is having such a tough time. When the market turns it will be the mature brand heavy markets which will hold their rate and increase occupancy levels the quickest."

He also warned that dropping rates to stimulate demand was " a myth" and that managers should focus on back of house and cutting costs where possible rather than slashing prices.

Seminar figures revealed:

  • Investment in the London hotel market was down to £500m in 2008 from a high in 2005 of £1.5b
  • Revenue per available room (revpar) in Europe was down 4.2% in 2008 compared with 5.9% growth in 2007
  • Europe's best performing markets for revpar were Belgium and Germany (up 4.6% and 4.1% respectively), while Italy and Spain saw the largest falls (down 9.9% and 5.4% respectively).

Government promises loans of up to £20b to help small businesses >>

Mal and HdV puts expansion plans on hold >>

Hilton and Millennium announce new hotels in Liverpool >>

Read more news on the credit cruch here >>

By Emily Manson

E-mail your comments to Emily Manson here. jobs
Looking for a new job? Find your next hotel job here with jobs

The Caterer Blog]( Catch up with more news and gossip on the Caterer Blog here
[Newsletters For the latest hospitality news, sign up for our e-mail newsletters.
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking