Top hotel chains, including Four Seasons and Six Continents, the former Bass Group, have been hit so hard following last month's terrorist attacks in America that they are appealing for reductions in the business rates paid on their properties.
The hotels are to ask the Valuation Office Agency to review the rateable values on their sites. These are used to work out rate bills for businesses and are linked to the rental value of a property.
"Many hotels will now be looking for a reduction in their rateable values as a result of the downturn in trade," said Brian Scott, partner at surveyors Gerald Eve.
Mr Scott, who advises companies including Four Seasons and Six Continents, added: "It [the attack] has had a markedly adverse effect on trading, particularly on the London hotels."
Martin Couchman, deputy chief executive of the British Hospitality Association, said: "There is a lack of visitors, particularly from America," adding that there was a "real problem in London".
Six Continents is looking at the trading impact of the 11 September terrorist attacks on New York's twin towers and Washington's Pentagon and will be considering what actions to take after its review, said a spokeswoman for the group. Four Seasons refused to comment.
The current outlook in the hotel industry might not be completely bleak, however, for such cash-rich companies as Hilton and Six Continents.
According to a survey by property consultants Jones Lang LaSalle, the recent fall in the share prices of hotel companies could lead to good buying opportunities and speed up consolidation in Europe. The European market is fragmented and merger and acquisition activity before the slump was high.
"The once vastly fragmented industry [in Europe] is seeking to consolidate itself in order to compete more effectively on a global platform," said Arthur de Haast, managing director at Jones Lang LaSalle.
According to Mr de Haast, the terrorist attacks have led to a pause in merger and acquisition activity, but he believes it will be short-term.
Consolidation in the American market has dramatically slowed since 2000 and deals in Europe have rapidly increased.Reuse content