Recession-hit hotels tempt customers with cheap rooms and free golf

The industry has been hit by a drop in demand, particularly from the business sector, as firms have cut back on conferences and meetings because of the recession.

Now one chain of midmarket hotels, De Vere Venues, is offering rooms for 10 a night, while others are seeking to attract holidaymakers through added extras.

The five-star Gleneagles, in Perthshire, has trimmed its basic price back – it is still 190 per night for a room, but a two-course lunch at one of its restaurants has been thrown in as well. It is also offering a room with free golf on one of its highly ranked courses for 225 a night.

The luxury Old Course Hotel in St Andrews is also offering free golf with some of its room rates. In Edinburgh, the Sheraton Grand has trimmed its prices to 195 for a double room for a night. Another offer promises a free video camcorder to record your stay.

Iain Herbert, chief executive of the Scottish Tourism Forum, the industry umbrella body, said offering added extras was now "a common thread".

"The feedback I am getting is that the leisure market is holding up very well but the business market has fallen. Hotels who rely on the conference market are finding times very tough," he said.

Colin Paton, the chairman of Edinburgh Principal Hotels Association, said: "Hotels are a perishable product and it is better to sell it at a lower price than not at all.

"At the moment, however, there has not been a really huge decrease in prices. Both leisure and business tourism may be down but they have not fallen off a cliff yet. What hotels are doing instead is adding value."

One exception is De Vere Venues, which has introduced an airline-style pricing system to cope with the effects of a downturn in business bookings. It is offering rooms for 10 in 20 of its business-orientated hotels in the UK.

A spokeswoman said: "

We are aware of the economic situation and wanted to buck the trend by encouraging people to stay at our venues."

The 10 offers usually sell within 48 hours and then prices go up by increments toward the relevant staying date. "It has been very successful," she added. "It is a bit like the airline model.

Demand is weakening but there is business to be had out there."

Hoteliers at all levels of the market are pinning their hopes of riding out the recession and the credit crunch on the value of the euro and the dollar remaining high compared with sterling. That will both bring in more overseas tourists and be a disincentive for British holidaymakers to go abroad.

Debbie Taylor, head of the British Hospitality Association in Scotland and chief executive of the Old Course Hotel, said slashing prices was not an option at the luxury end of the market.

"More people are holidaying at home this year because European holidays are 30% more expensive and US holidays are 35% more expensive," Taylor said. "There is no point in slashing prices because then it takes you a long time to recover. If you slash prices then you have to compromise on quality."

A spokesman for the Sheraton said: "In the current economic climate, customers are looking for value for money and we believe we are giving that with special offers."

A spokesman for Gleneagles said: "There is no doubt that the current economic climate is affecting the way our guests consider where and when to travel."