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Personnel Today

Economy: Recruitment market by sector: Hospitality

by Personnel Today 3 Aug 2002
by Personnel Today 3 Aug 2002

The hospitality industry is still struggling to recover from the aftermath
of the foot and mouth disease and the global downturn following the terrorist
attacks of 11 September.

During the first quarter of 2002, output of the hospitality sector decreased
by 2%. The volume of business currently stands some 7% lower than the peak
achieved in 1999.

The hotel sector is still in the doldrums, suffering from weak overseas
demand, a downturn in domestic commercial activity and only a modest revival in
consumer bookings. Overall, spending in hotels fell to £10.5bn in 2001, a
decline of nearly 5%.

This downward trend continued into 2002.

According to PKF’s latest figures, occupancy in the regions was 67.7%, a
2.7% fall on March 2001. In London, occupancy dipped by 4% to 74.5%, down from
77.5% for the same period last year.

Compounding the gloom average room rates are reported to have fallen by 4.3%
in the regions to £60.27 and by 13.5% to £101.96 in London.

By contrast, the restaurant sector fared much better in 2001, with income
rising to £18.1bn, an increase of nearly 12%. Demand was particularly strong in
the second half of the year, and this trend looks set to continue into the
first half of 2002, assisted by a buoyant household sector.

The commercial catering sector also enjoyed strong growth in 2001, with
revenues rising by nearly 19%. Similarly, spending in bars was also relatively
buoyant with revenues rising by 5% in 2001 to £19.2 billion.

The broader trends in the hospitality market are reflected in the fortunes
of companies within the sector.

The Hilton Hotels Corporation reported a dramatic 38% decline in first
quarter income, but noted an improving trend, and some optimism about the
future.

Thistle Hotels saw a 14% fall in turnover and occupancy was flat, but the
average room rate had fallen 12%.

Jarvis Hotels has posted a 49% decline in profits for the year.

On a more optimistic note, the Whitbread hotel and leisure group saw first
quarter like-for-like sales up 6.3% in Travel Inn, and 3.1% at its Beefeater
restaurants.

JD Wetherspoon saw like-for-like sales in the 39 weeks to April 28 rise by
5.4%, with total sales up 25% to £438.1m.

The holiday industry is also recovering from the end-of-year slump.

First Choice Holidays said its first-half losses would be greater than last
year, but it has seen a strong recovery in its mainstream business.

The trend is bucked by Mytravel, previously Airtours, which has a million
unsold holidays. Some analysts believe the change of name has confused
consumers and sent them elsewhere.

Holidaybreak, the travel group, saw the drop in demand for its adventure
holidays compensated for by the strength of its camping and hotel breaks
businesses.

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Within entertainment, Power Leisure, the Irish bookmaker that trades as
Paddy Power, reported a leap of 68% in turnover for the 15 weeks to April 16.
Its betting shops turnover was up by 42%, and its telephone and online
divisions rose by almost 300%.

Holmes Place, the upmarket health and fitness club operator, reported flat
like-for-like sales in its mature clubs, due to an increasingly competitive
environment.

Personnel Today

Personnel Today articles are written by an expert team of award-winning journalists who have been covering HR and L&D for many years. Some of our content is attributed to "Personnel Today" for a number of reasons, including: when numerous authors are associated with writing or editing a piece; or when the author is unknown (particularly for older articles).

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