THE GENERAL consensus in the inbound tourism industry is that 1999 is far from being a boom year for UK business.
The British Hospitality Association admits that following a good start to the season, it is receiving mixed reports from its hotelier members.
It believes that by the end of 1999, the market will either be flat or a few percentage points up. The British Tourist Authority is forecasting a 2%-3% rise in visitors, but its figures include daytrippers.
The outlook from tour operators, meanwhile, is worse. They predict a fall of between 2% and 5% in tourists making overnight stays in Britain this year.
British Airways Holidays managing director Roger Heape blames the continuing strength of the pound, particularly against the euro, high taxes such as air passenger duty and 17.5% VAT on hotel rates and concern over the war in Kosovo.
As a result of the political situation in the Balkans, Heape claims the number of US visitors to the UK is down 10%-15% compared to last year.
However, the BTA said the UKhas not fared as badly as other European countries closer to the Balkans.
Nevertheless, Heape insisted:”The US, which is one of our most important generating countries, is noticeably softer. The reason is the Kosovo effect. The TV coverage has had an impact on the market.”
Heape said hotels in London – which represent 50% of the total inbound market – are cutting their prices because of the lack of buoyancy in the market.
He welcomed the moves to cut hotel rates, which rose by 3%-5% this year and 8%-10% the year before.
“London has done an superb job of delivering a better product and repositioning its image in terms of food and nightlife, but the relative price of destinations is an important factor when people decide where to go, as it is in the outbound sector,” said Heape.
“People don’t come to the UK blindly. They compare it against other destinations.”
British Incoming Tour Operators Association chief executive Richard Tobias said there had been tactical pricing by hoteliers who need to generate additional business.
“There is concern that numbers during the summer months will be down,” he said. “Despite the reduction in interest rates there is little evidence the pound has softened enough to attract sufficient business.”
Looking towards 2000, both Tobias and Heape appealed to hoteliers not to slap on big price rises to capitalise on the newmillennium.
Tobias said:”We are urging them to take on board the fact they should be pricing winter and summer 2000 at a realistic rate. It’s not a time for profiteering. Those who feel 2000 will be a bonanza need to think again.”
British Hospitality Association chief executive Jeremy Logie defended hoteliers pricing strategy, pointing out that labour costs are rising due to new legislation restricting working hours and imposing a minimum wage.
He said hoteliers would want to increase prices in 2000, but added: “I hope they are not going to be greedy.
“Hoteliers are becoming sensible about price increases because we have low inflation and it is well known London is expensive. I don’t think people are silly enough to outprice themselves.”