News - 11th Sep 2007

Are Full Hotels desirable or beneficial to the Tourist Industry?

In Alesund hotel sites are difficult, many being conversions around the harbour, as are the two buildings in the centre of this image. Local opinion is that there is a need for one other hotel in the town, a 1905 art nouveau architectural gem

The immediate response to the question of whether 100% occupancy is desirable would probably be an unequivocal ‘yes’ from both Tourism authorities and Hoteliers. Examined in a little more depth and the answer is not such a reassuring positive. In cities like London high occupancy rates have three effects:

• They increase hotel profitability
• They stimulate new investment in the market, with new openings both compensating for substandard hotels leaving the market and moderating prices by making more rooms available
• They deter visitors with stories of ‘rip off rates’ and the expense of visits.

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