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Uncertainty is the only safe prediction

25 January 2007

These are good times for the UK hotel industry, but how fragile is this performance, asks hotel industry consultant Melvin Gold

Most UK hoteliers will have given themselves a pat on the back as 2006 turned into 2007. The old year was undoubtedly a good one for most hoteliers and the new year looks certain to be better. But how certain can anyone be these days?

My opinion? I think 2007 should be great for the UK hotelier and might even exceed the peak performance levels of the late 1990s, but there's a world of difference between "should be" and "will be". There are simply so many factors that could derail this year's performance.

Last year's interest rate rises, in an attempt to stem house price growth, served mainly to reduce household discretionary spend. Will they, in turn, impact on domestic leisure travel and food and beverage spend in 2007? Could this, perhaps, be offset by people being deterred from travelling abroad after the additional tax on air travel?

Fewer tourists might also arrive in the UK because of that or, if not, perhaps the bed tax will be introduced and drive them away.

On the economic front the weak dollar might deter the high-spending US market, while back at home it's likely we will have a new prime minister by the summer - what changes will that bring?

There's also increasing speculation about a royal wedding, which has brought tourist windfalls in the past and, of course, we have to assume that Wembley Stadium will finally open this year and that London will benefit (at the expense of Cardiff), but then we thought that this time last year.

Of course, overhanging all of this is the unwelcome spectre of global instability, terrorism and the major threats that these bring. If the worst does happen, or even if the threat of it continues to increase, this could change everything.

Hoteliers are no doubt hoping that the worst doesn't happen and are looking forward to 2007 being the great year that we all expect. Let's keep our fingers crossed.

Hotels have reason to hope for a record-breaking year in 2007, but it would be foolish not to allow for unexpected disasters

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

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