The persistent fear of terrorism could undermine the promising recovery in the UK hotel industry, a new report has warned.
The study, conducted by accountancy firm PKF, claimed that although 2004 should see the sector bounce back from a depressing last three years, tourists could still be put off by potential terrorist acts.
PKF said that Britain, and London in particular, could struggle to attract overseas visitors due to the Iraq war and the recent Madrid bombings, which triggered warnings that the UK could be next.
The accountancy firm revealed that British hotels saw occupancy fall by 0.1 per cent last year to 71 per cent. Average room rate slumped by 2.3 per cent to £72.45 compared with 2002.
London hotels suffered particularly badly last year, with yields from rooms falling by 4.5 per cent, compared to 0.5 per cent in the rest of England.
PKF put 2003’s poor performance down to the Iraq war, with a rally at the end of the year too late to help hotels recover their losses.
Hotels and bed and breakfasts have endured a turbulent last three years, with the September 11 attacks and the foot and mouth crisis in 2001 forcing many small operators out of business.
Robert Barnard, of PKF, said that although any recovery this year will not be won without a fight, he believed the signs are still food and there is a genuine case for optimism.
“As usual occupancy will drive this recovery and we expect it to make steady progress throughout this year, with London ending up just below 80 per cent and the regions breaking confidently through the 70 per cent barrier.
“Whilst we are optimistic about the industry’s chances of recovery, we cannot help but be aware that international events could once again derail the recovery process.
“The recent bombings in Madrid, plus warnings that the UK could be a target for terrorist activity, throw a shadow over current tourist and business travel and could impact on the hotel industry’s ability to thrive in 2004,” he said.
