Hotels and the crisis

As Alexandra mentioned, not only restaurants have been hit by the economic crisis, but also hotels and especially luxury hotels. However, even the recession not every hotel market was affected. Hotels for leisure travelers were much less affected.

In 2009 the majority of people said that the crisis did not affect their intentions to travel. However, we see business companies cancelling meetings to avoid traveling. The reason why the business travel suffers more is that leisure travelers are more sensitive to worsen the economic condition than business travelers. Hotels needed to cut down the cost, but many hotels by this attend did not manage to survive and shuted down.

As demand fell, the number of hotels and bed spaces declined as many small independent hotels were forced out of the market. The consumer started putting more pressure on room rates and started expecting more 'value for money' from the hotel industry.

Recession kept hitting hotels not only throughout 2009 but also 2010. It took five years for average room rates to reach pre-recession levels.

POSTED BY: Katerina Argyrou