UK hoteliers are relying on domestic and European leisure markets to keep trade afloat during a war with Iraq - but they have concerns that there may not be enough to go round.
London, which is still suffering from the drop in long-haul and business travellers that followed 11 September, would be hardest hit by another Gulf war, predicts Melvin Gold, managing director of hotel consultancy services at PKF.
While a short, sharp war could bring some stability, Gold believes a prolonged conflict could trigger a worldwide recession, as did 1991's Gulf War, which afflicted the hotel sector for four years.
Richard Thomason, chief executive at Jarvis Hotels, feels the current uncertainty "damages business more than anything else" and makes it difficult to plan ahead.
Since 11 September, the group has redirected its marketing away from business customers and towards the domestic leisure and short-break markets.
Hilton International has also been developing domestic and European markets since 11 September. "We are confident we are as well placed as anybody can be to deal with any effects of action in Iraq," said a spokeswoman.
The budget brands also believe their traditional reliance on domestic trade will keep business buoyant. "We have seen year-on-year growth, and we don't feel that the war with Iraq will have a significant effect on Premier Lodge," said a spokeswoman for the Scottish & Newcastle brand.
Robust UK short-break and European business has kept occupancy at Thistle Hotels' London properties above 75%, albeit it at reduced room rates. Cheaper flights and sterling's decline against the euro has made the UK a more attractive destination for the European market.
Thistle chief executive Ian Burke was optimistic that recession could be averted. "The macro-economic factors are more favourable than 10 years ago," he pointed out, with inflation, debt levels and new hotel stock much lower now than in the early 1990s. Also, he added, new structures such as outsourcing and sale-and-leaseback deals gave hotels more flexibility in adjusting their costs to revenues.
By Angela Frewin