The economy will not recover for at least five years, hoteliers were warned today.
Speaking at consultancy Deloitte’s 20th European Hotel Investment Conference, leading economist Roger Bootle predicted the situation would be much worse than a recession and more like a depression.
“The economy has fallen off a cliff since September and deflation is now a greater threat than inflation,” he told the conference. “We will see three to five years of either weak or negative growth”
The economic meltdown is set to move from sector to sector “like the Black Death” as other industries feel the knock on effects of the banking crisis, warned Marvin Rust, hospitality managing partner at Deloitte.
“Our previous experiences are pretty much obsolete and this period is challenging for any business model,” he said. “I see no recovery in 09 for the UK.”
But Barbara Cassani, executive chairman of Jurys Inns Group, said there was no point in moaning about the situation and issued a stark warning to hoteliers.
“There are so many ‘big time charlies’ out there – what did you think would happen?” she asked the delegates. “You need to shut up, quit whining and get back to business.”
David Michels, director of Strategic Hotels & Resorts and the Jumeirah Group, described the current hotel market as “extremely predatory”. “Everyone’s hoping everyone else goes bankrupt so they can buy them cheap,” he said.
In its latest quarterly report on the European hotel market, published today, Deloitte revealed that the year-to-September hotel performance fell slightly across the continent.
Revenue per available room was down 1.5% to €76 driven by a 1.9% drop in occupancy while average room rates decreased marginally to €112.
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By Emily Manson
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