Waiting for the Hotel Guests to Return

Mar 12, 10 | 1:53 am

By Dominic Walsh

The 1,600 delegates assembled in Berlin this week for the annual International Hotel Investment Forum were all asking each other one question: when will the gloom that has enshrouded the hotel industry over the past 18 months lift?

To judge by a survey of more than 150 UK hotel executives conducted by the law firm DLA Piper, the answer is: not any time soon. Only 2 per cent of respondents are expecting a sustained upturn this year and more than half predict it could be at least 2012 before room rates return to pre-crisis levels.

The pessimism over room rates is understandable, given that the financial crisis has prompted a reappraisal of expenditure by corporate customers. While most hotel companies have been able, at least in part, to mitigate the impact by enticing leisure travellers with promotions, the hit on revenue per available room (revpar) - the key industry measure - has been savage.

Many operators have started to talk in recent weeks about the first signs of increased activity in the corporate market, but, as the DLA Piper survey shows, it is difficult to find anyone brave enough to call the recovery. Richard Hartman, the chief executive of Millennium & Copthorne Hotels, said: "It's bottomed out but I wouldn't call it a recovery. The business market is showing signs of life but it's coming back at a different price-point."

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Source: timesonline.co.uk