PRESS RELEASE

June 2008

UK Hotel Market Slowdown

With the CBI recently announcing that the Economy will rise in 2009 by the lowest level in 17 years, a new report has found that lower levels of consumer and business confidence are resulting in an increasingly competitive UK hotel market.  The impact of the credit crunch is clearly being felt in the hotel industry in 2008, though report publisher MTW Research also points to signs of a downturn in the market long before the tightening of fiscal policies by many of the UK banks. 

MTW Research’s report “UK Hotel Market Leaders Rank & Profile” has found that the market has risen by around 14% since 2004, with expectations of a relatively slow paced sector in the short to medium term focussed on the lower value ‘budget hotel’ sector.  Given recent trends toward a preference for the lower value sector by many businesses and consumers and the likelihood of this preference continuing as the economy slows, MTW point to relatively static profit margins which are now depressing the market’s overall net worth.  In addition, rising costs of food, fuel and labour have also dampened the industry’s ability to generate any real growth in profitability, with this set to continue for some time to come. 

Against a backdrop of static profitability, the report identifies rising levels of debt taken on by the hotel market leaders, despite falling property prices impacting on fixed assets.  In 2008, total liabilities exceeded £10 billion for the first time, reflecting an increase of 20% since 2004.  This growth in debt clearly outpacing sales which grew by around 18% according to MTW Research.  In addition, MTW also suggest that the trend toward rising borrowing will continue in the short to medium term, particularly in the South and South East with a rise in construction and refurbishment investment demanded by the build-up to the Olympic Games, mostly funded by borrowing. 

In addition to highlighting key market trends in the hotel industry, MTW’s report also provides illustrations from 2004-2012 of average turnover, profitability and other key financial ratios.  The research for the report found that whilst there is likely to be a period of ‘re-adjustment’ in the market in the near term, future prospects in general are relatively optimistic for the sector in terms of average performance. 

The report goes on the identify and rank the leading hotel companies active in the market at present, with their respective turnover, profitability and other key performance indicators.  MTW also provide a useful key performance indicator chart enabling the reader to quickly gauge a company’s recent performance in the market.  In addition, the report also includes full mailing address details and senior decision maker contact details for the leading hotels. 

The report is priced from GBP 375 and can be purchased from MTW Research by calling 08456 524324 or by ordering on MTW Research’s website, where a free sample is available to download, alongside further details on this and other markets in the building and construction industry. 

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