The hotel sector faces a bleak economic outlook with job cuts and a drop in standards, a top hotelier has predicted.

Supranational Hotels consortium managing director Niels Pederson said the industry faced a “long hard flight ahead”. Three and five-star properties are likely to do best, and four-star and budget hotels will be hardest hit, he believes.

As well as rising costs and credit pressures, there are other trends working against the industry, he said. Hotel brands are losing their loyalty because of too many ‘weak-link’ properties, which leave guests disappointed and seeking a change.

Budget hotels will miss out as people fly less frequently as the low cost airlines become more expensive due to fuel costs. Some new planned hotels will become apartments or office blocks.

He added: “A golden opportunity now exists for the three-star hotel market. They will win providing they improve their levels of friendliness and service in order to satisfy the former four-star ‘floating guests’ who are looking to save, but also maintain the standards to which they are accustomed.”