London hoteliers shrugging off recession after another bumper summer

27-Sep-2011 - Last updated on 26-Apr-2021 at 17:41 GMT

Next year's Olympics, the Farborough Air Show and the Diamond Jubilee are expected to ensure a busy year for London hoteliers

London hoteliers have so far successfully ridden out the economic storm, while rates in the provinces have remained ‘stubbornly flat’, according to the latest PricewaterhouseCooper (PwC) report.

The report shows that, while London’s performance in the first quarter of 2011 fell someway short of expectation (partly weather-related), a bumper quarter two and three have put it back on track for full year RevPAR growth of just over eight per cent, mainly driven by rate increases.

Robert Milburn, hospitality and leisure leader for PwC UK, said: “with nearly nine months under the belt, 2011’s forecast outturn looks pretty much assured, particularly for London.

“In the provinces though, things remain much tougher and while occupancies have nudged forward slightly year on year, rates have remained stubbornly flat as hoteliers have failed to recover pricing power post the technical recession.”

Busy year ahead

Next year, the Olympics, the Farnborough International Airshow and the Diamond Jubilee are expected ensure a busy year for hoteliers – especially in quarter three when more occupancy records will be broken.

ADR gains for the year as a whole are expected to be between 0.8 and 5.7 per cent, with RevPAR increases of between 2.8 and 8.3 per cent. For the provinces, 2012 should be a better year outside London and there should be some Olympic uplift, albeit less than London’s.

“Everything is riding on the Olympics,” added Milburn. “But outside quarter three we continue to expect an unremarkable year with the risk of falling RevPAR in quarters two and four in London as the capital feels the impact of the new supply coming on to the market.

“The provinces should make some progress but getting rates up will remain a challenge for most.”