Editor's Blog

A double inflation rate hike: who is it good for?

Funny old world, post-referendum, isn’t it?

UK hotel prices have gone up by five per cent year-on-year – double the rate of inflation, according to the latest Hotstats figures and Hotstats say the market was "unabated" by election uncertainty.

Pablo Alonso, CEO of HotStats, said: "The UK hotel market would have been forgiven for stumbling a little in the messy aftermath of 8 June. However, the strong economic fundamentals of the UK remain and the hotel sector is buoyant, illustrated by the continued upward trajectory this month."

With all due respect, that’s missing the point. What happened was the following: the pound collapsed by 15 per cent following the EU referendum and this year international tourist arrivals rose by nine per cent! The result was an increase in hotel (and Airbnb) occupancy which translated to rate increases.

But that is hardly good news for UK event organisers. Already under pressure from purchasing/procurement departments, the last thing we need now is an above-inflation rate hike. Perhaps that is already feeding through because London hotels saw declines in conference and banqueting of 5.8 per cent.

Alonso also said: "UK hoteliers are currently enjoying the benefits of Brexit, which has fueled a record number of overseas visitors to the UK."

I know what he means but again he is incorrect. There have been no benefits of Brexit as yet because Brexit hasn’t happened. A referendum has happened and it caused a fall in the pound, pushing up international arrivals and rates. Hoteliers have benefited from a rise in room occupancy as a result but London’s hoteliers will be less pleased with the downturn in events and UK event organisers seem to be increasingly looking outside the capital for their venues if the banqueting figures are to be believed.

What will actually be the benefits of Brexit to the events industry? The jury is still out. But what do you think?

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