Sector Dispatch - Hotels, guest houses and B&Bs

Market pressure and legal rulings affect hotels and B&Bs

The hotel industry, including guest houses and bed and breakfasts (B&Bs), has been subjected to a range of market pressures during the 2008/09 recession which look set to continue throughout 2010. Recent legal rulings and the new Digital Economy Bill will also have an impact on the sector.

'Staycation' trend to continue in 2010

The staycation trend, where Brits stay in their own country for their holidays, has had a significant impact on the hotel industry, according to a number of industry analysts.

PricewaterhouseCoopers (PwC) claims the staycation trend, especially where people are opting for lower budget holidays at campsites and caravan and holiday parks, along with the decline in the corporate travel market, is to blame for the huge increase in hotel insolvencies at the end of 2009. Figures from PwC show that there was a 68% increase in the number of hotel insolvencies during Q4 2009 compared to Q3, and a 31% increase year on year. A spokesperson for PwC said that the staycation was boosted in 2009 by "the advent of glamping (glamorous camping), upmarket campsites, a warm spring, lack of job security and a squeeze on consumer spending".

Statistics have also shown that hotels across the UK are experiencing an overall fall in revenue - apart from London hotels. The capital's healthy tourism industry is widely thought to be the reason that London hotels are doing better than regional hotels. According to figures published by PKF Hotel Consultancy Services, occupancy rates in London were higher in 2009 than in 2008, while occupancy rates in the rest of the UK fell year on year.

Holidaying Brits increasingly chose to stay at campsites, caravan parks and holiday parks during 2009 and the number of overnight domestic holiday trips taken during the first nine months of 2009 grew by 13%, according to the UK Tourism Survey by VisitEngland. The staycation trend is predicted to continue in summer 2010.

A survey carried out by research agency BDRC in January 2010 revealed that 70% of respondents are likely to book a holiday in the UK in 2010. Nearly 40% of those questioned said they were considering taking their main holiday in the UK.

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