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Hotel predictions for 2009

28 December 2008 by

It will be hard to avoid the mood of doom and gloom as hotels tighten their belts across the board. Expect huge pressure on trading as the industry hits lowest point in the current economic cycle during 2009.

This will be characterised by significant falls in occupancy and a fall in revenue per available room of between 10 and 22%, with hotels expected to cut their rates by up to 50%. But once again, the budget sector is likely to perform well as business travellers continue to trade down.

The weakening pound is expected to be the beacon of light in what seems to be year of increasingly dim prospects, with more Brits expected to holiday domestically next year and higher numbers of Europeans choosing the UK as a better value holiday destination. Another positive will be the falling cost of construction.

Expect more hotel property sales, especially in the second half of the year, as operators start to struggle and look to raise funds by selling assets.

All in all it's going to be a tough environment where, more than ever, hoteliers will have to look after their customer well, ensure value for money and show them a good time.

2008 - Hospitality news review of the year >>

KPMG predicts surge in smaller M&A activity >>

Whitbread reveals plans to cut spending in 2009 due to downturn >>

Jurys Inns to appoint a new chief executive by mid-March 2009 >>

UK hoteliers must look for creative ways to cut costs >>

By Gemma Sharkey

E-mail your comments to Gemma Sharkey here.

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