UK hotels face most challenging period for 17 years

09 February 2009 by
UK hotels face most challenging period for 17 years

UK chain hotels are facing the most challenging trading conditions in 17 years, according to market analyst TRI Hospitality Consulting (TRI).

The report predicts that London will experience a 10% drop in revenue per available room (revpar) this year followed by a further 0.5% dip in 2010.

Outside the capital revpar is expected to decline 8% in 2009 and a further 2% in 2010, based on the assumption that the UK economy will contract 1.7% in 2009, returning to growth of 0.2% in 2010.

Inbound visitor numbers, which account for more than half of London hotel overnight stays, are estimated to have decreased 2.7% last year and will fall by a further 0.7% this year, according to VisitBritain.

Jonathan Langston, managing director, TRI Hospitality: "VisitBritain's forecast for inbound tourism in 2009 might seem fairly modest in the light of the widespread global downturn.

"Yet, if it continues, the low value of sterling against most major currencies may have a moderating effect on anticipated reductions in inbound tourism. For the first time in many years London must appear a good-value destination."

TRI predicts, like the recession of 1991, that there will be only one full year of recession in the UK for the hotel sector, followed by a year of modest recovery.

"UK hotels are better prepared for recessionary times than they were in 1991 due to a combination of structural reforms to cost bases during the intervening years and far greater access to markets through today's enabling technologies," Langston added.

Focus Hotels safeguards 500 Real Hotel Group jobs>>

Hotel transactions bomb in 2008 with little sign of imminent recovery>>

Revpar falls by 11.4% at London hotels>>

Hotel industry has to brace itself for a rough year>>

By Gemma Sharkey

E-mail your comments to Gemma Sharkey 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 Group 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