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Hotel recovery ‘under threat’
Hotels across Europe could see room occupancy plummet from next year, according to industry analysts Otus.
Its latest report predicts there will be too many hotels chasing too few guests next year due to over-expansion by some chains during the recession combined with a drop in demand.
In the UK, average cuts to the public sector of 25 per cent will reduce demand for hotel accommodation by two million room nights in 2011, said Otus.
At the same time, domestic leisure demand will be hit by an increase in VAT from 17.5 per cent to 20 per cent in January and an expected sharp rise in unemployment.
Demand from overseas visitors will also be hit by similar economic policies across Europe, and by the budget reductions imposed on VisitBritain, said the report.
As there has been a 10 per cent rise in the number of rooms offered by chain hotels in Europe in recent years, hotel chains in the UK will need to sell 17 per cent more room nights in 2012 just to maintain the room occupancy levels achieved in 2006, said Otus.
"Even the Olympics and the Queen’s Jubilee in 2012 will not compensate in the UK," it said.
Director of Otus Paul Slattery added: "Without economic policies to boost hotel demand and reduce unemployment, hotel chain room occupancy will struggle over the coming years to achieve 60 per cent in the UK.
"At these levels the recovery of the hotel business will be under threat.
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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