The UK's hospitality sector could be under pressure for at least another two years according to the Intercontinental Hotels Group. Revenues across the Intercontinental chain are continuing to fall with little sign of an upturn on the horizon. Mistakenly selling 5000 rooms for less than a penny a night might have contributed to their plight.
It seems that fewer people are taking holidays in hotels and even those few are looking for deals. Competition in the market is providing these deals and making it hard for the sector to maintain profit margins.
The Intercontinental Hotels Group has 4,300 hotels worldwide has seen revenues decline by 25% but it is nevertheless doing considerably better than most of its peers. The group's revenues have fallen 16% in the first half of the year compared with an industry decline of 18.7%.
One of the group's hotels - The Crown Plaza - near Venice was recently the subject of a costly mistake when a two night stay was advertised for 1 Euro. Rooms usually cost between £90 and £150 per night.
Within hours over 5,000 bookings had been taken with some people booking multiple rooms. The hotel's 153 rooms are now fully booked until 2010. The Intercontinental Group is honouring all the reservations.
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Intercontinental Hotels Group