UK chain hotels are facing the most challenging trading conditions in 17 years yet remain better prepared than the last recession, according to a new forecast
London is predicted to suffer from a 10% drop in room revenue (RevPAR) this year followed by a further 0.5 per cent dip in 2010.
In the provinces, RevPAR is expected to decline by eight per cent this year and a further two per cent in 2010.
The bleak picture is painted by TRI Hospitality Consulting amid predictions of a continuing decline in overseas visitors to the capital.
But hotels are in a better position to withstand the recession than they were during the last economic slump in 1991.
TRI managing director Jonathan Langston said: “It is our prediction that despite the coming heavy falls in RevPAR, UK hotels will maintain profit conversion at a higher level than they did in the early 1990s.
“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.
“In addition, they enter this recession enjoying much higher occupancies than 1991. Then, there was something of a lag of six months between economic change and its impact on hotel trading.
“Things move faster these days; although forward visibility remains minimal, any reaction to more positive economic news will be more rapid.”
by Phil Davies
