The Financial Times reported on the 12th of November that the New York Hotel market is in crisis, Vijay Dandapani, chief executive of the Hotel Association of New York City, said that if half the city’s 640 hotels survive it will be a “great” outcome! He went to on say. “Realistically we aren’t going to see any improvement until the second quarter . . . The industry is really bleeding. It’s not just on life support, it’s comatose.” See HERE for more details. Lots of hotels have already closed or are in the process of being closed, the 476-room Hilton Times Square hotel closed permanently last month after its owner, Sunstone Hotel Investors, handed back the keys to lenders. Another Times Square hotel, called The Hotel, said revenues had become “nothing short of catastrophic” when it asked for 90 days’ forbearance from paying its mortgage, The Roosevelt Hotel in midtown Manhattan, which opened in 1924, is to close.
The hotel market drives the conference centre market in the UK, the same dynamic applies in New York i.e. 59% of all conferences are held in hotels, with only 18% being held in conference centres or training venues, see HERE. In the UK as in New York there has been a huge increase in supply; according to a Knight Frank study HERE, UK hotel supply was predicted to grow by 2.9% in 2019 with an astounding 34% of that taking place in London, London’s stock of rooms was forecast to increase by a further 4.5% in 2020. Just behind London (though in my opinion in London) is Heathrow with 4,100 rooms opening since the start of 2016! Looking further out the schedule of future supply is daunting, there are currently 35,000 rooms currently under construction and expected to be delivered by 2023. Using this slightly longer focus, London again dominates though there are other worrying hotspots, Manchester, Cambridge, Cardiff and Swindon for example. The slightly good news in terms of meeting venues and conference rooms is that many of the largest developers are groups who traditionally don’t incorporate significant meeting rooms and conferences spaces into their offering i.e. Whitbread accounts for 20% of the new build, with Hilton (who often do have significant numbers of conference rooms) following up with 11%. A recent survey by Cvent of 700 odd industry figures is also encouraging, 52% believe that their 2021 in-person spend will be higher than in 2019! see HERE
New York may well be entering a death spin and that’s with far less of a lockdown i.e. Hotel occupancy in September was only down by 30% compared to a year earlier! In London the occupancy figures are far worse i.e. occupancy fell from 65.8% to 29.7% see HERE.
Overall, with a huge increase in supply, and massive decrease in demand, it seems inevitable that London will follow New York into a dramatic tailspin, (as it has so often in the past.) In that London dominates the UK to such a large extent and that many of London’s problems are replicated across the UK, it seems highly likely that these depressing effects will be felt nationally.
In this sort of market, a venue booking agency is more important than ever. An agent who is talking to venues all day every day, where rates vary enormously, knows where to find the very best deals for conference rooms and meeting space. We can save you not only money but time as well, as booking a venue is very time consuming. Additionally, no two contracts are comparable, and hidden charges are second nature to many venues. At The Venue Booker, we have been booking venues for clients for over twenty years, so may we suggest that with our wealth of experience, now is the time to call us.
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