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Hoteliers told not to slash rates in response to slowdown

11 November 2008 by
Hoteliers told not to slash rates in response to slowdown

Hoteliers must resist the temptation to cut rates even though the credit crunch will continue to squeeze the hotel industry for another two years, experts warned this week.

Speaking at the first day of the annual conference of the British Association of Hospitality Accountants (BAHA), Jonathan Langston of consultancy TRI compared the downturn with the last recession, pointing out that back then decisions over pricing strategy were largely "in the hands of third parties".

Langston told delegates at the conference hosted at the recently-opened Sofitel at Heathrow Terminal 5, that this time hoteliers were - and need to remain - in control.

"The focus has to be on maintaining the rate," said Langston.

Cheryl Hawkesworth of software provider IDeas told the gathering that the negative impact on businesses may not begin to lift until mid or late 2010.


Hawkesworth, who held senior roles in both front and back of house before moving into to revenue management software, echoed the conference's opening discussion by a panel of industry figures who agreed that "once you start rate cutting, it is almost impossible to go back".

"In the long term it is only the budget chains who will benefit from rate slashing," Hawkesworth told Caterersearch.

"At the other end of the market there are properties which would rather be empty than cut their rates because of their brand value".

Read more news on the credit crunch here >>

Travelodge considers job cuts to fund price war >>

Downturn can strengthen businesses >>

Kew Green completes £140m refinancing >>

By Elizabeth Mistry

E-mail your comments to Elizabeth Mistry here.

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