Hotels braced for new year blues

THE WINDFALL that Britain's hoteliers were expecting from the millennium is looking increasingly like fool's gold.

A survey has shown that only 60 per cent of hotel rooms have been booked for the year-end celebrations. This represents a huge anti-climax for the many hotels that jacked up their prices in the expectation of a flood of reservations. Restaurateurs are faring little better.

Industry experts believe that this millennium aversion has arisen in part from the perception that hoteliers are profiteering. Fraser Ramzan, leisure analyst at Lehman Brothers, said: "Those hotels which have increased charges are only about half or quarter full. In fact, many will be closed."

The Martlet Inn in Langford Budville, Somerset, is among those venues likely to be seeing in the new millennium quietly.

"We put the posters up at the beginning of November and there doesn't seem to be a lot of interest," a spokesman said. "People have been a bit flat about what they are doing. But we are selling more now."

Meanwhile, Scott's, a restaurant in London's Mayfair, has yet to decide whether to open after managing to sell only three tables for its pounds 250, three-course millennium supper. Many of the Whitbread-owned Marriott hotels will be closed, and Bass will be keeping the shutters down at most of its restaurants.

Bernard Lambert, managing director of Meridian Hotels and Restaurants, a subsidiary of Granada, believes the key to success has been to resist the temptation to inflate prices. "We had a policy of not putting up rates to levels with no justification. In London, we have only raised prices according to de-mand. Doubling or even trebling prices has scared people off."

Even so, Meridian's hotels were only about 70 per cent booked around the turn of the year, although he expected the vacant rooms to fill up in the next three weeks.

The survey, by Caterer magazine, also blames babysitting costs for the national apathy. Transport is also a concern. The centre of London, for example, will be closed to traffic.

A disappointing New Year's Eve will come as another blow to the quoted hotel companies, whose shares have fallen dramatically this year. Investors have been turned off the sector by the impact of sterling's strength on tourism and fears of over-supply, prompted by a surge in new hotel openings.

This malaise has spread to travel agents, who have found that the anticipated rush for millennial breaks has failed to get off the ground. Only 10 days ago, Thomson Travel blamed its third recent profits warning on the lack of year-end bookings, a problem also encountered by its main rival Airtours.

Of course, there are destinations that have been able to sit back for years and wait for the guests to come flooding in. The five-night package offered by the 221-room Crieff Hydro in Perthshire, for instance, has been sold out since 1995.

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