The region's hotel trade is the latest sector to fall victim to the downturn, according to new figures.

The latest research found that almost a third of South West hotels have reported that takings over the last year were down by more than 10 per cent.

And almost half of the region's hotels saw a reduction in overseas visitors, with even more reporting a marked drop in UK visitors.

The findings came in survey of South West hotels carried out by the specialist hotel and leisure team at accountancy firm Bishop Fleming.

According to 42 per cent of South West hoteliers, the fall in overseas visitors was due to Britain not being perceived as a value-for-money destination.

And the majority suggested that the reduction in bookings from UK visitors was the result of poor summer weather.

Despite the challenging reduction in UK and overseas visitors, more than half of South West hoteliers or 60 per cent, reported that extra red tape legislation is costing them thousands of investment, without any obvious benefit.

According to Will Hanbury, head of Bishop Fleming's Hotel & Leisure team: "This is a crucial sector for the South West's economy. Global market conditions are restricting bookings at a time when extra Government red tape is making life more difficult for this sector."

While most South West hoteliers believe that the advent of cheap flights from the region's airports are good for the regional economy, more than a third say that those cheap flights are reducing the number of UK bookings for family holidays in the South West and making very little difference to the number of overseas tourists coming to the region.

"The role of regional airports and cheap flights is hugely emotive", said Mr Hanbury. "It is easy to see their impact on exporting UK holiday expenditure: it is more difficult to identify a significant contribution to boosting inbound visitors."

More damning was the verdict of Bishop Fleming's survey of South West hotels on the role of the region's tourism agencies. More than two-thirds said that local and regional tourist agencies make no difference to bookings.

"This is a major issue for the industry", said Mr Hanbury. "While Government funding for national tourism promotion is being reduced, new initiatives are being created in this region".

While almost a quarter of hotel-owner respondents to the Bishop Fleming survey said that the current economic downturn will have no effect on future bookings, more than a third said that the downturn will decrease the number of both UK and overseas visitors.

"South West hoteliers have to adjust their offering to the fast-changing economic scene, at a time when national budget-brands are cutting room-rates and hunting for new South West locations", said Mr Hanbury."

"It is hugely significant that almost half of our respondents said that overseas visitors view Britain as being poor value for money.

"This is a major challenge and opportunity for South West hoteliers."