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Poor performance across the board in November for London hotels

By Peter Ruddick , 21-Dec-2012
Last updated on 21-Dec-2012 at 14:13 GMT

Hotels in London suffered a drop in occupancy, average room rate and revenue per available room (RevPAR) last month as November served up the second worst profit decline of the year for the capital's venues.

According to two surveys detailing trading success of hotels across the UK, London's hotels experienced drops in all the major measures of performance while the picture was slightly brighter in the provinces.

Temporary blip

The HotStats UK chain hotels market review for the month, out today, shows London hotels suffered only a slight drop in occupancy - down 0.3 per cent from the same period a year ago to 82.6 per cent. However a nearly 3 per cent drop in average room rate left revenue per available room at £112.72 - down from more than £116 a year ago.

Similar data released last week by accountancy and business advisory firm PKF showed a similar trend.

However Robert Barnard, partner for hotel and hospitality consultancy services at PKF, said the results should not be a cause for undue concern among hoteliers.

“"Operators in London have had a less than stellar month, but there’s no need for panic as occupancy and room rate are still at impressive levels. London’s fundamentals remain strong so this is unlikely to be much more than a temporary blip for the capitals hotel market," he argued.

Profit drop

The poor performance was even more marked given the low base for comparison - November 2011 was also a difficult month for London hotels.

According to the HotStats survey, carried out by TRI Hospitality Consulting, November was the second worst month of the year with a 5.6 per cent drop in profit per room in the capital. 

“Not even a 3 per cent increase in the number of visitors to the World Travel Market (WTM), to almost 29,000 trade visitors, was enough to save face for hotels in London and the drop in achieved average room rate for November was the greatest year-on-year margin of decline in this measure in 2012," Jonathan Langston, managing director of TRI Hospitality Consulting, said.

"Although volume remained strong in the city and hotels in London are undoubtedly on course to achieve a third consecutive year of profit growth, it is unlikely that hoteliers will be popping champagne corks as they look to more challenging times ahead," he added.

Decent

For hotels in the regions, November was a slightly better month. Although HotStats' figures indicate a substantial decline in profit per room (4.8 per cent down), both PKF and HotStats' surveys show small growth in occupancy and average room rate in November.

"This is another decent set of results from hotels in the regions," Barnard commented. "Skilful management and the lack of any meaningful new development are helping to keep rooms yield in positive territory despite the dreary economic outlook." 

UK Hotels - November 2012 Performance (Compared to November 2011)

HotStats

London

  • Occupancy - 82.6 per cent, down 0.3 per cent
  • Average room rate - £136.41, down 2.7 per cent
  • RevPAR - £112.72, down 3 per cent

Provinces

  • Occupancy - 70.7 per cent, up 0.5 per cent
  • Average room rate - £70.35, up 0.5 per cent
  • RevPAR - £49.71, up 1.2 per cent

PKF

London

  • Occupancy - 82.9 per cent, down 1.3 per cent
  • Average room rate - £136.20, down 3.4 per cent
  • RevPAR - £112.96, down 4.6 per cent

Provinces

  • Occupancy - 70 per cent, up 0.1 per cent
  • Average room rate - 59.62, up 0.4 per cent
  • RevPAR - £41.71, up 0.5 per cent

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