London hotels suffer 20 per cent drop in business

War on terrorism: Tourism

The extent of the damage to Britain's tourism since 11 September became clear when research showed the number of Americans visiting London had fallen by more than half. Hotels lost a fifth of their business in September and suffered even more this month, according to the first performance figures for the industry since the attacks.

The collapse in visitors from Japan and America has pushed London hoteliers into crisis, and provoked calls for a rescue package on the scale of the aid given to farmers after the foot-and-mouth outbreak. Yesterday the London Tourist Board said although it had not given up on the international market, the best hope of recovery lay in campaigns about to start aimed at persuading Britons, and Londoners, to take their holidays in the capital.

Bookings at London hotels had been falling since the start of the year mainly because of the American downturn but they plummeted after 11 September, the survey by business advisers Pannell Kerr Forster (PKF) said. Their preliminary figures showed that in September the number of rooms occupied by American visitors in London was 45.5 per cent down on 2000. But the fall since 11 September was "likely to be much higher".

The number of Japanese visitors had plunged by 39 per cent and all room rates had been pushed down 6.6 per cent, the survey of most of London's three-star to five-star hotels reported. Their overall revenue fell by 22 per cent.

Hotels outside London fared comparatively well, with a decline in room occupancy of just 1.7 per cent. But with American visitors making up 30 per cent of the London hotel market the capital's tourist industry is in a worsening crisis.

Melvin Gold, managing director of hotel consultancy services at PKF, said: "October performance figures are ... likely to be even worse because they will reflect a full month of travellers' fearful reactions to 11 September, combined with the average rate impact of hoteliers' discounting tactics to fill empty rooms.

"September and October are traditionally the strongest months of the year for London hotels but the combination of the impact of 11 September on travel and tourism and global economic downturn means that 2001 will be remembered by London hoteliers as a year when the only certainty was uncertainty."

The London Tourist Board has calculated that 88 per cent of businesses linked to tourism had suffered a downturn since 11 September and warned yesterday the industry was now facing an "unprecedented situation". Katharine Grice, a spokeswoman, said two campaigns were about to start to persuade British people to help the capital through the slump. One would encourage visitors from outside London to take a holiday in the capital and the other would persuade Londoners to be tourists in their home city.

Vincent Burke, spokesman for the London Chamber of Commerce, called on the Government to cut airport tax and look at deferring VAT and national insurance payments to help hoteliers through the bad times. "It may be that the Government could help companies the same way it helped farmers in foot-and-mouth. Tourism in London is struggling, but it is not a cause for panic. If the international situation stabilises, business will return quickly."