Post-Olympic summer slump predicted for London hoteliers

28-Apr-2013 - Last updated on 26-Apr-2021 at 19:41 GMT

With London 2012 now firmly in the rear-view mirror a post-Olympic slump for London hoteliers is up ahead, according to a new report

London hotels should prepare themselves for a less busy than expected summer period despite the long-predicted boost from last year's Olympic Games, according to a new report.

Leading discount travel website Hotwire.com has said a number of industry experts are predicting a year-on-year fall this summer in some of the key hotel metrics, including occupancy, hotel prices and revenue per available room (RevPAR).

Creative

Despite Government predictions of an additional 4.5m visitors to the capital in the four years following London 2012, several analysts are now pointing to Vancouver and Beijing where hoteliers faced a slump a year after hosting the Games due to a number of new venues increasing competition and lowering prices.

“It’s no secret that hotel construction, and therefore quantity of rooms, surged in London leading up to the summer Games," said Tara Stangel, director of Hotwire.com's hotel team.

"What is still unknown is how many of those rooms will be filled in the years coming. It’s even harder to predict when we take into consideration the weakened European economic climate and declining US tourism rates.

"Most signs point to the fact that London hoteliers will have to be more creative when it comes to sustaining occupancy during these post-Olympic years," she added.

In 2011, one year after the Vancouver Winter Olympics, the city's average hotel prices dropped by 29 per cent and the same was seen in Beijing where RevPAR fell by 43 per cent following the Games.

Profit decline

The warning for London hoteliers comes as the latest HotStats UK hotel chain survey reveals the capital's hotels suffered a 7.3 per cent profit decline in the first quarter of the year.

In the first three months of 2013 RevPAR dropped by 3.4 per cent. The fall in revenues has been attributed not to a drop in demand levels, which have actually remained robust, but to the fact hotels are currently attracting a higher proportion of lower yielding leisure and group tour demand.

Corporate-related demand was also stagnant in the first quart of the year in London.

While hotels in the provinces actually grew their RevPAR in March they too suffered a profit decline as a result of rising costs.