'Strongest month of the year' for hotels

According to preliminary figures released this week by business advisory firm BDO, operators across the country recorded the highest yield growth figures seen so far this year – a further sign that hotels are contributing to the nascent economic recovery.

In the capital, rooms yield rose to £115.21 - an 8.5 per cent year-on-year increase. This was driven by a 7.6 per cent improvement in room rate from £122.36 to £131.66, and a 0.7 per cent rise in occupancy to 87.5 per cent, compared with 86.7 per cent a year ago.

Rooms yield in the regions increased by 6.5 per cent year-on-year to £45.12, compared to £42.36 in October 2012. This was the result of a 1.7 per cent rise in room rate from £58.34 to £59.32, combined with a 5.7 per cent improvement in occupancy from 72.6 per cent to 76.1 per cent.

Momentum building​

Robert Barnard, a partner at BDO said: “In aggregate, this is the strongest set of results that we’ve seen so far this year, demonstrating that momentum is continuing to build in the sector.  It is encouraging to see such rapid, sustained and geographically balanced growth in the industry after the challenging trading conditions experienced during the recession.

“The data suggest that hotel operators may have turned a corner during the summer after a particularly sluggish start to the year, and are now making an important contribution to the UK’s economic recovery.

“If hotels are able to maintain this level of performance for the remainder of 2013, then we may see the sector report positive rooms yield growth for the year as a whole, which would have been almost unthinkable back in the spring.”

The BDO results are supported by the latest HotStats survey of around 625 full-service UK chain hotels, which found that hoteliers in London confirmed their rebound with year-on-year revenue and profit increases per available room of 6 per cent and 8.5 per cent respectively.

Although occupancy remained flat at 87.2 per cent, a surge in average room rate of 7.2 per cent to £158.57 boosted RevPAR by 7.1 per cent.

Ancillary revenues also experienced growth per  available room, most notably from food (up 4.7 per cent) and meeting room hire (12.6 per cent), leading to a TrevPAR increase of 6 per cent.

West Midlands hotels​

While agreeing with the overall ‘positive’ performance in the Provinces, the Hotstats survey found that properties in the West Midlands experienced a slightly different set of results. West Midlands hotels showed that total revenue and  profit growth is not always equally distributed with this region experiencing challenging trading conditions in October

Notwithstanding a 1 per cent increase in average room rate, RevPAR remained unchanged at £50.74 due to a 0.7 per cent drop in occupancy at 72.4 per cent. With leisure revenue per  available room remaining flat, meeting room hire per  available room was the only department showing a

positive movement of 4.4 per cent - revenue per available room derived from food and beverage decreased by 1.2 per cent and 0.5 per cent respectively. As a result, TrevPAR decreased by 0.4 per cent to £103.36.