Scotland's hospitality industry is preparing for price wars as businesses strive to meet tough targets set long before the economic downturn and try to stay afloat.

Scotland's hospitality industry is preparing for price wars as businesses strive to meet tough targets set long before the economic downturn and try to stay afloat.

Hotels are already dropping prices by up to 15% and will "batten down the hatches" as the industry is plunged into the rates battle, and restaurants will be forced into similar aggressive cut-price marketing, according to one of Scotland's leading hoteliers.

Robert Cook, the chief executive of One Devonshire Gardens, Hotel du Vin and Malmaison, said the weak pound will woo European visitors in a reversal of the budget airline exodus experienced in Britain in recent years.

However, while it will be tough for businesses, there will be bargains to be had.

Aberdeen-born Mr Cook said: "The industry is going to have a tough 2009 and 2010. Everybody is going to feel it, no matter how big or how good you are, whether you are five star, four star or three star. People's incremental spend in restaurants and bars has been quite buoyant and will remain so at this time of year, but I think people will wake up on January 2 and realise they've got a big credit card bill at the end of the month and all of a sudden there are people at all sorts of levels being made redundant.

"We are going to have to be absolutely prudent. We are definitely, in our business, looking at the cost base. We are going to be very aggressive in how we sell our business and how we communicate to the outside world a lot more. We will have a lot more tactical offers but equally, on the other side of the coin, I've just arrived in Belfast and because of the euro strengthening against the pound it is bringing people up from Dublin to do their shopping.

"In Scotland, we are going to get a lot of European visitors because all of a sudden we are going to become affordable. We are going to have a lot of our own domestic trade - people aren't going to want to go Spain or Italy if they're not getting value for their pound."

Mr Cook has already committed to major projects, including the Hotel du Vin in Edinburgh - a £12m investment bringing 80 jobs; Malmaison in Aberdeen, a £14m development and 80, and Hotel du Vin in St Andrews, a £10m development safeguarding 60 employees and creating up to 30 new jobs. He said: "We started the projects so we'll finish. The difference between this recession and the last, other than it's a different vehicle that's brought us into this recession, is that 20 years ago eating out wasn't where it is today: eating out is part of the social fabric.

"People culturally are now used to eating out but no matter which restaurant you are at or which hotel, everybody is going to be giving offers to come and stay but also to come and eat. The up-cycle of tourism is the sway of the euro against the pound, that is definitely going to help.

"The great thing is that many of the budget carriers come into Glasgow and Edinburgh and Aberdeen from all of these places they have made famous but which no-one ever heard of before.

"The Easyjets, Flybes and Ryanairs are going to help the Scottish economy."