Value and imagination key for hotels, says report

The Hotel Report Guide to UK Branded Hotels 2009 said: "The economic environment is so fast-moving that pundits are unable to make convincing predictions more that two or three weeks out.

“However, times of crisis bring out the best in our sector, which has met the challenges out there with imagination and flexibility. There have been casualties, but there have also been deals, new openings, even new brand launches. Reports of the sector’s death have been greatly exaggerated.

“People will continue to travel and, when they do, they will look to the hotels which offer them true value. It may be the end of the chocolate on the pillow, but for those who are attuned to their customers’ needs, it may still be a time for growth.”

There have also been opportunities for experienced hotel managers who are popping up in distressed properties outside their own estates to give their advice.

At the root of this are two things: the rise of cold, hard business planning over the last two decades in the hotel market, which has led to an increase in skills and the fact that banks have got sufficient issues without owning hotels as well.

Pebble Hotels’ Ted Kennedy, told the Guide: “You’ve either got to get better or cheaper. In a
way it’s going back to basics because when it was easy and money was just flowing in, people could be a bit slapdash. Now you’ve got to be really good.

“We’re doing a bit of salvage for banks, when they’ve got a problem and they don’t want to put the hotels into receivership. It’s better than what some do and kill the business – the banks don’t want the properties back, as long as they can operate a bit better then they’ll be OK.”

Kennedy also had a top tip for those hoping to avoid the slowdown in commercial business – namely keeping your star rating down. “FDs in big companies have to have rules, and the easiest way to cut costs is to say ‘no four stars’,” he said, adding that the group had been told by the AA that it could get four stars for its Potters Heron Hotel in Romsey, Hampshire, but chose to remain at three.

With falling values, falling guest numbers and falling debt, the sector is facing a tough year, but it is not without hope.

Jeremy Hill, head of hotels at Christie & Co, said: “2009 will be another challenging year for the hotel sector and some operators will undoubtedly fare better than others.

“Those companies with low gearing, a strong brand and a sustainable operating model, will be able to trade through the challenging times, and will also be in the best position to increase market share by taking advantage of quality opportunities at reduced prices.”

The Hotel Report Guide to UK Branded Hotels 2009 is available now, costing £485. Click here​ to order online or contact Charlotte Feenan on 44(0)1293 846 578 or email Charlotte.Feenan@william-reed.co.uk​.