The lack of government meeting activity, which has traditionally driven the mid-market hotel sector, "is now clearly taking its toll”, according to research by events agency Grass Roots. Hotels in the three-star market saw rates decrease across the UK, with the largest drop occurring in the south west, where rates reduced by 35 per cent.

Meanwhile, London hotel rates showed an increase of 18 per cent in the five-star market (south east England posted a 41 per cent uptick in this sector) but a drop of 10 per cent in the four-star category.

Alan Newton, Grass Roots’ global supply chain director, added: “The forecast for the remainder of 2012 looks largely favourable for hotels. After seeing a large dip in meetings activity before and during the Olympics, we are now seeing an upsurge in events. Despite this, it is unlikely that rate increases will continue at the same level going forward and instead we expect to see single digit rate growth at most in the UK and Europe for the next six months.”

The Grass Roots Meetings Industry Report, meanwhile, showed the current European hotel market to be a mixed bag. Barcelona saw four-star rates increase by 30 per cent in 2012 to date, while Brussels and Paris saw increases of 27 and 28 per cent, respectively, in the same sector and 25 and 20 per cent, respectively, in the five-star market.

Geneva’s five-star hotels now rank as the most expensive meeting hotels in Europe with an 11 per cent rise bringing average rates to £121 per night, while Athens, rather predictably, suffered the largest drop, with prices falling by 39 per cent in the four-star market and 29 per cent in the five-star market.

The Grass Roots Meetings Industry Report is now in its sixth year and for the first time available as an app.

Pictured: Alan Newton