Indefence of the mid-market

Abstract

Mid-market hotel groups have come under close scrutiny in recent months. Among journalists, analysts and industry leaders alike, those of a bearish nature have forecase the demise of the traditional UK three-star hotel industry and, along with it, the doomed prospects of the mid-market hotel group operators. This descent into oblivion is expected in the next recession, whenever that is, according to these pundits. Their reasoning is that a number of mid-market (three-star) hotel chains, such as Regal, Jarvis and MacDonald, acquired a number of so-called ‘obsolete’ hotels from the larger quoted hotel chains during the 1990s. These hotels were written off for their poor performance in the last recession, and it is held that they will therefore necessarily underperform again in the next recession. Repetition of such views has become increasingly common, almost a mantra — ‘four-star and budget good, three-star bad’. The authors believe that this view is ill considered and should be challenged. This report makes that challenge.