UK Recession - Hotels Suffer Despite the Trend towards Staycations

A hat tip to Geoff for spotting this useful BBC report on the problems being experienced by the overall UK hotel sector. 2009 saw a sharp rise in the number of hotel insolvencies in the UK, despite what many thought would be a helpful trend - UK consumers prefering to stay here in Britain for their holidays.

One issue was a drop in demand from overseas visitors, which fell by 6% in 2009. But it looks like the bigger reason was simply customers trading down and reducing their average hotel spend per visit. Guests ordered fewer hotel extras, and the important high-margin conference trade also suffered as businesses looked to reduce they spent on hotel meetings. One winner from this trend, which we reported on a few months ago, was branded coffee shop chains. Meeting customers and clients at a Starbucks or Costa Coffee has become more popular rather than hiring expensive (and often poorly equipped) hotel meeting rooms.