‘Tariffs to drop to pre-9/11 levels’: Supranational

Europe- and Scandinavia-wide hotel industry ‘adjustment’ – major consequences
– ‘tariffs to drop to pre-9/11 levels; unlikely to recover for years’

Supranational Hotels managing director Niels Pedersen is predicting far-reaching consequences for the tourism sector as a Europe- and Scandinavia-wide downward re-adjustment in demand begins to bite.

The head of the international 1250-hotel brand forecasts tariff cuts of up to 50%, a 10% reduction in the average length of business travel stays, the collapse of the impulse leisure market, and the widespread tearing-up and re-negotiation of accommodation procurement contracts.

He says that client companies will insist that travelling executives become more cost-sensitive, and this will hit the most highly-starred hotels, expensive restaurants, and the use of taxis. Hotels will be favoured that include complimentary added-value services such as a basic breakfast, car parking, WiFi, a newspaper, and bottled water. Participation in discretionary conferences and training courses and also attendance at exhibitions will be hit.

Pedersen suggests that the bleakest anticipated scenario which could follow the last seven years of growth is that business hotel tariffs will drop to pre-9/11 levels, the volume of holiday rooms booked could fall by 25%, and that hotels will significantly reduce the number of management staff they employ. It is likely that these difficulties will seem the worst-ever for the industry because of the stark contrast with the excesses and successes of the recent past.

Concludes Pedersen, ‘the good news, however, is that this re-adjustment will force hotel service levels and personnel productivity to rise as hotels try harder, will cause staff rudeness and disinterest to diminish, and it will re-sharpen the competitiveness of the hospitality industry. It will also eliminate boastful and extravagant behaviour by executives when they are away on business.’

‘This is a wake-up call on behalf of financial prudence throughout the sector as it is unlikely that prices will recover to recent high levels for quite a few years to come.’

Note to editors
Supranational Hotels are represented in over 70 countries. Annual demand through the electronic reservations brand exceeds 200m USD arising from over 1m room nights booked.

More information:
Niels Pedersen
Managing Director
Supranational Hotels, London
Tel. 0207 357 0770

Note: Niels Pedersen is happy to take calls on his mobile at any time, including the evenings +44 (0) 776 890 8782

Or Charlotte Martins
Savvy Consultancy
07968 316576

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