The last year has been a fractious one. I think we all suffered from the effects of the banking crisis. It was exacerbated in the hotel business by the panic reactions of hotel companies to perceived rather than actual threats.
The UK market actually held up very well, with occupancy averages touching lows of 63 per cent in the Provinces whilst the capital enjoyed lows on 74 per cent. By Christmas London hotels were once again quite full, with complaints of there being no rooms at the Inn echoing Bethlehem two millennia before.
What we are going to do when the Olympics arrive I dread to think, as there has been no real attempt to stimulate an increase in hotel provision. Maybe the lack of support for the tourist industry by the British government, such as cutting Visit Britains’ budget, is actually a cunning plan? By not encouraging tourism or aiding investment (as France has done for example with a 5 per cent VAT rate) despite tourism being over 8 per cent of all British economic activity maybe Whitehall plans to enable the capital to cope with an influx of maybe an extra 300,000 visitors by keeping ordinary tourists away.
Whilst the US occupancy levels, down in some areas to 35 per cent, gave every reason for their new build and refurbishment markets to stall the same was not the case in Europe. With France boasting it didn’t go into recession, Germany leading the pack out and the UK benefitting from in effect a 30 per cent devaluation of the pound, the hotel market remained remarkably buoyant.
However, the panic in the UK by hoteliers to cancel projects has lost them a valuable year to get their hotels up to international standards. Unless refurbishment programmes restart with vigour then complaints will come thick and fast at Olympic time.
The problem will be, as it always is after a recession, that the manpower will not be available to jumpstart a vigorous programme. Design practices shed staff fast and as do suppliers. For both, recruitment of replacements is a slow and painful process.
