The Eton Collection, owner of luxury hotels including famous City property Threadneedles, has seen a "significant" drop in corporate bookings since the beginning of the year as the credit crunch has begun to bite.

Peter Tyrie, managing director of the group, which operates 13 hotels across Europe, said that although revenue per available room had largely held up against the slow-down, the business had seen a 5% drop in corporate bookings since January.

"Business and corporate guests from the USA just aren't travelling as much. Whereas before they would come over for a meeting, now they will make a conference call," he told Caterer.

Tyrie is concerned that the leisure market may also drop soon. "Our trade is certainly not as strong in Edinburgh: where it used to be impossible to get a Saturday night booking it's now possible, and that's quite a significant change," he said.

The Eton Collection, which was recently bought by JJW Luxury Collection for £70m, has introduced a specially priced "credit crunch munch" - three courses priced at £17.50 - to entice "jaded City workers" to Threadneedles. It is also reviewing its energy costs to ensure they are kept as low as possible.

But Tyrie said he was not willing to lower his room rates in order to entice more corporate clients. "It's quite difficult to save money as we don't want to sacrifice the rate that it has taken a long time to build," he said.

The Eton Collection has two hotels in development in Vienna and a golf resort in the Algarve, Portugal. It also plans to expand into the USA - in New York, Chicago, Boston and Washington - as well as in major gateway cities in Europe.

The company, which is currently converting the Berners hotel off Oxford Street ahead of reopening in 2009, is rebranding its hotels to reflect the acquisition by JJW. The name of the new business has yet to be decided.

Corporate hotel rates to drop?

The Eton Collection may not be willing to drop room rates to entice more corporate customers, but some UK hotel operators may be forced to drop their rates because of the economic conditions. This is already happening in the USA and, with budget and midmarket groups reporting an increase in corporate business, experts expect downward movement when corporate rates at the top hotels are reviewed this autumn.


JJW Luxury buys The Eton Collection >>

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Hospitality operators must offer good value to survive the credit crunch >>

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By Gemma Sharkey

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