Hotels

After six years of strong demand for hotel accommodation, with high occupancies and ever upward room rates and profits for many (especially in London), the UK hotel sector now faces a very poor outlook for 2009 and into 2010. 

PwC's latest November forecast UK hotels forecast: the bigger the boom, the bigger the bust summarises the deteriorating economic and trading environment. With a 1.8% decline in GDP now forecast, the forecast for 2009 from PwC's Hospitality & Leisure team is a near ten per cent tumble in UK RevPAR, with London RevPAR plummeting by 23%, due mainly to a fall in room rates.

The ricochet from continuing turmoil in financial markets means the outlook for business and leisure travel is not encouraging and evidence points to companies firming up on cost control and to consumers hanging on to the cash in their wallets. Firms have been eliminating unnecessary travel and conference spending and seeking value accommodation and meetings products. For London, the impact of reduced corporate travel and spend is more severe, although the impact of Eurozone tourists may soften the blow in the short-term.

PwC's Hotels team advises its clients on the current challenges - as well as the opportunities - in the sector. These include managing in a downturn; corporate and real estate tax issues; mergers and acquisitions; changing consumer trends including those in emerging markets (where we have developed a city wealth quantitative model).

We also advise on managing people costs; legal and employment law; refinancing debt; sustainability and corporate social responsibility; managing royalty and franchise programmes; as well as auditing leading hotel companies. 

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