Restaurant and hotel discounts still not increasing sales

By Becky Paskin

- Last updated on GMT

Related tags: Economy, Hotel, Unemployment

Restaurant and hotel discounts still not increasing sales
Room and menu prices have fallen at the sharpest rate in record history, but sales have continued to plummet along with them

Restaurant food and hotel room prices have fallen at the sharpest rate in record history as businesses respond competitively to the UK’s disastrous trading conditions.

Latest CIPS​/Markit data covering the health of the service sector has revealed that despite a heavy increase in discounted prices across restaurants and hotels during January, sales continued to slump.

The data shows that as businesses attempt to cut back on costs through redundancies and non-replacement of leavers, the unemployment rate has risen at a record pace, causing general sentiment to be historically low.

Roy Ayliffe, Director of Professional Practice at CIPS, said hotels and restaurants had once again suffered the worst in the service sector.

“The start of the year did little to bolster the health of the ailing UK services sector as tough trading conditions continue to weaken business performance,” he said.

“With competition heating-up, companies were forced to reduce their prices and axe staff at an unprecedented rate. But as overall levels of sector activity fall, it’s clear that such efforts are superfluous: only the fittest will survive.”

The report also showed that many businesses were passing on the saving from reduced transport and energy bills to their customers during January.

Businesses were last month warned by Vantis​ client partner for business recovery Simon Glyn to adapt to the changing market conditions if they wanted to survive the recession, and were advised to invest in effective management and staff training.

Related topics: Trends & Reports

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