A HOTELIER has warned that the 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.

Derek Harvey, general manager of the Cardiff Marriott and former chairman of the capital’s hoteliers’ association., 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,” Mr Harvey 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% 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 provincial city, which for a capital is a major concern. While the year-to-date room rate average for the UK regions is up 2%, Cardiff is down 6%.

“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.”

The most recent figures released by PKF Hotel Consultancy Services show that occupancy in the capital’s hotels was down 5.6% in April compared to a year before, with room rate also down 8.2% from £68.75 in April 2009 to £63.11 this year.

However those figures are thought to have been negatively affected by the volcanic ash cloud preventing travellers coming to Cardiff.

Mr Harvey said he was mystified that there are hotel owners who are planning to build yet more hotels in Cardiff while he and others in the industry believe the city has 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,” he said.

Mr Harvey, whose own hotel has recently completed a £3m refurbishment, warned that it will be the smaller, weaker hotel brands that will be pushed to the wall if the hotel expansion programme continues unchecked.

“The hotel industry currently contributes more than £50m a year to the Cardiff economy and employs around 2,500 people,” he said.

“If the current rate of hotel expansion continues without a convention centre being built then I fear that 10% of those numbers are at serious risk.”

Cardiff Council’s executive member for economic development, Neil McEvoy, said: “I would not agree that there are too many hotels in the city, but agree that we need a conference or convention centre. A conference centre is one of the missing pieces in Cardiff’s economic jigsaw.

“Other cities attract a lot of business and people to their cities through convention centres. Cardiff needs to do the same and create a world class venue for such events.

“This is most certainly a priority for economic policy in the city.”

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