Due to the strong pound in 2007 trading conditions for the UK hotel industry were difficult. There was a sharp reduction in the rate of growth of visitors in the year to September 2007 compared to the same period a year before.
When inflation is taken into account, it would appear that average spend per visitor has fallen in real terms.
With the US economy slowing down, the prospects are for further falls in North American visitors during 2008 and with constraints on consumer spending in the UK there increased investment in hotel facilities is unlikely over the next 12 months or so.
The UK cinema industry is now in a period of consolidation following strong investment in multiplex cinemas during the early part of the decade.
Overall numbers of screens have increased but within this increased number, multiplexes have taken a much greater share over the past eight years.
The cost of building the facilities for the Games in 2012 has risen as designs have progressed.
Site remediation and preparation work has been underway for some time, and substantial construction work on the Olympic Park is scheduled to start in mid-2008. This will provide a major boost in the short term, falling away from 2011 as projects are completed.
Overall the near term prospects remain subdued for the hotels and leisure sector with a small rise this year and a fall next.
The Olympics should increase demand for hotels. Given a recovery in consumer spending growth in the second half of the forecast period, the sector is expected to grow again from 2010 onwards.