Speculation elsewhere in the trade press is on what hotel will go into receivership first, but an earlier indicator is the state of health of the design practices, where the news is not at all good. Several practices in both the USA and UK have made multiple redundancies, in one case making some 40 designers redundant. Short time working is making an appearance and jobs coming into the Job Vacancies columns at Hotel design have gone from 20 a month to half a dozen (although we are still receiving ads, so it is not all desperation) Nor is this just confined to the UK or US markets, as press reports this weekend suggest that the Dubai property market is about to implode, with Nakeel, developers of the Palm islands announcing over 14% of its staff are being made redundant, and estate agency staff also being put out of work.

Yet some practices like GA International are recruiting staff as their work load shows no signs of diminishing but rather increases. My estimate is that hotels remain profitable as long as occupancy remains above about 45%, a view shared by Robert Barnard of hotel consultancy PKF, who believes none the less that there will be “some trading down” by guests. In the last recession many hotels became shabby as owners tried to save money by postponing much needed refurbishments. All that happened of course was that guests went down the road to the more recently refurbished hotel – no-one will stay in a rundown hotel without driving its low rates even lower – and the groups who adopted this policy have never recovered from the damage to their reputations.

Predictions of rate cuts now abound despite stalwarts urging hoteliers to hold their rates – after the London bombings most London hotels held their rates and recovery was quick, whilst the rate cutting that characterised the early 1990’s recession took four years to recover from. In the 1990’s chains such as Shire Hotels under Ian Harkness held their rates and were one of the few groups to remain profitable throughout.

The message seems clear. Hotels will do better accepting lower occupancy but maintaining their rates. Even a 30% fall in occupancy would still leave average occupancy at over 50% on current levels (September occupancy levels were comfortably over 82%), and if hotels cut back on non-essentials then they should remain profitable and able to continue to maintain the appearance of their rooms. Refurbishments may be delayed only at the risk of rates falling because Guests will not pay for cheapness, certainly not in a top end hotel. The expectations of quality and service will remain; value for money (problematic with the rates that have been charged in recent years by London hotels) will be in demand. Quality is a perception that is governed by the quality of the interiors – shabby or worn upholsteries, carpets or woodwork are noticed subliminally. Designers are skilled at making tight budgets work in terms of the star ratings, and the argument for the employment of professional experienced hotel designers is stronger in a recession not weaker.