The continuing worldwide growth of the hotel sector could be jeopardised this year by the slowdown of the US economy, but the European market should remain strong, according to industry experts.
Professor Roger Bootle, managing director of Capital Economics, warned delegates that the knock-on effects of the depression in the US house market will mean slower growth this year - at about 2% - which would subsequently be mirrored in Europe.
But Bootle added that, despite the slowdown, he did not foresee a recession. "This year and next year growth may be weaker, because of the slowdown in the US economy, but the outlook in Europe is good," he said. "I expect a recovery in the economy in 2008, and the medium-term prospects for the UK economy are extremely good."
Lawrence Geller, president and chief executive officer of Strategic Hotels & Resorts, was equally positive. "Even taking into account the East Coast wave theory, where Europe's economics reflect those of the US, there should still be a long way to go in Europe," he told delegates. "The good days should be here to remain for another five years."
Kurt Ritter, president and chief executive of Rezidor Hotel Group, said the emergence of eastern European, Indian and Chinese workers and travellers would soften the cyclical nature of the market.
However, Jonathan Ashbridge, partner at law firm Maxwell Winward, sounded a note of caution, warning that the availability of finance was creating some potentially dangerous deals in the hotel market.
"I can't understand why people are doing it," he said. "It's up to investors to walk away from 90% of the offers currently on the table, as they are silly deals."
By Emily Manson