Hotel chain the Hilton Group is to proceed with one of the large construction projects that was put on hold in the wake of September's terrorist attacks in the USA.
The hotelier, which has a capital spending programme of £150m, said it was going ahead with a £20m hotel in Gatwick that is being built by contractor Sisk.

Desmond Taljaard, head of property at Hilton Group, said the decision was made after a three-week review of the group's developments. He said: "We never said we were stopping it. We wanted to re-examine our plans in line with economic projections. The conclusion was that we were still confident enough to proceed."

Hilton's decision came despite BAA's assessment this week that the drop in air travel after 11 September has hit Gatwick harder than Heathrow or Stansted.

Taljaard said the firm expected that the market will have returned to some degree of normality by the time the hotel opens in 18 months.

He added that the group was looking to attract funds for a £40m hotel in Deansgate, Manchester. He said: "We do not want to build it on spec, not in this climate."

The conclusion was that we were still confident enough to proceed

Desmond Taljaard, the Hilton Group

Hilton's move came in a mixed week for the hotel market. Hotelier Whitbread put £150m of work on hold, including two Marriott hotels in London, and Leicester developer Landmark Development Services scrapped plans to include a 200-bedroom hotel in its £70m Bridgewater Place tower in Leeds.

A revamped planning application for the tower, which will be the north of England's tallest building, is likely to be approved by Leeds council after alterations have been made.

Abbey Holford Rowe, the scheme's architect, said the move was a response to market conditions. A spokesman said: "There will be no hotel in the scheme. There is a lot of building of commercial leisure facilities in Leeds, so this is very much a change dictated by the market."