Hotels scared, says ex-Hilton boss
THE region’s hoteliers are facing a scary future, according to one of the sector’s most respected executives.
Sir David Michels, the former chief executive of Hilton Group, believes that while falling occupancy rates may be a problem now, hoteliers are already “pretty scared” about early next year when consumer and business spending are set to tighten even further.
Although August’s occupancy figures show that Manchester and Liverpool hotels have held up well, they will drop “quite some bit” in September and October, he told TheBusinessDesk yesterday, at the North West Annual Hotel Conference.
Despite this, he said the increase in occupancy rates (8.4%) and room yields (15.4%) that Liverpool hotels have enjoyed compared with last year wouldl not drop off once its Capital of Culture year is over.
“It’s got nothing to do with Capital of Culture,” he said. “Until recently and even now Liverpool has a very small number of rooms compared to Manchester. And as Liverpool becomes more accessible and famous there will be more demand for that same number of rooms.”
He dismissed suggestions that the proliferation of new hotel openings in Manchester over the last 18 months means the market is now over supplied.
“There hasn’t been too much supply. As soon as business goes down, people always say that, but that’s the same in any business,” he said.
“People will stop investing now, and then in seven or eight years time there will be a slight shortage [of rooms], because of the time lag.”
As the residential market has declined, some developers, such as Irish group West Properties, have turned to the more stable hotel market. West is behind no less than three schemes in Manchester city centre.
