Cardiff hotelier warns booming bed numbers are posing a threat to jobs
By Effective Communication
A RAPID rise in the number of new hotels opening and planned for the Welsh capital is posing a serious threat to jobs and business in Cardiff’s hospitality sector.
That’s the warning from the general manager of one of the city’s leading hotel groups and the former chairman of the capital’s hoteliers’ association.
Derek Harvey, General Manager of the Cardiff Marriott, says the number of hotel beds in the city centre has more than doubled since he first arrived in the capital eight years ago.
“At least 10 new hotels have opened since 2002, with the number of bedrooms increasing from almost 1,500 to more than 3,000. There are two new hotels with around 200 bedrooms each planned for next year and another six potential hotel sites being considered for development,” he said.
“I accept that we now have three major sports stadia, a brand new shopping centre and the Millennium Centre, but hotel growth like this is unsustainable and can only lead to business closures and job losses.”
Mr Harvey added: “Room rate levels in Cardiff are falling for the third year in succession – currently down almost 15 per cent on 2007 figures, and are now lower than they were when I first came to the Marriott eight years ago.
“Cardiff is also turning in a weaker room rate performance than the average UK provisional city, which for a capital is a major concern. While the year-to-date room rate average for the UK regions is up two per cent, Cardiff is down six per cent.
“With rates being driven down because supply is too great that can only mean one thing – hotels will be forced to cut even more costs which means staff numbers will have to be trimmed.
“What is even more mystifying is that there are hotel owners who are continuing to look at building yet more hotels in the city where I, and many others in the industry, believe we have already reached saturation point.
“The only thing that could possibly sustain this sort of growth is if Cardiff has its own purpose-built Convention Centre and, while we are a bit more hopeful that this project is now being seriously considered, it would still be years before we were able to reap any benefits from it – even if it happened.”
Mr Harvey’s own hotel boasts some of the best occupancy rates in the city, thanks in part to a strong national brand and the recent completion of a £3m refurbishment, and he warns it will be the smaller, weaker hotel brands that will be pushed to the wall if the hotel expansion programme continues unchecked.
“The hotel sector in Cardiff has seen an unprecedented explosion in the last decade, but we cannot ignore the fact that the market has been declining over the last two years, and is continuing to decline this year,” he said.
“I don’t know of any other city in Britain where the number of hotel rooms has more than doubled in the same space of time. If the long-awaited Convention Centre happened it would put Cardiff on the conference map and the growth of hotels would not be such an issue.
“The hotel industry currently contributes more than £50m a year to the Cardiff economy and employs around 2,500 people.
“If the current rate of hotel expansion continues without a Convention Centre being built then I fear that 10 per cent of those numbers are at serious risk.”
